Subject: File No. S7-08-08
From: Janet Douglass

May 19, 2008

File No. S7-08-08
"Naked" Short Selling Anti-Fraud Rule

Naked short selling destroys validity, credibility and integrity in the stock market. Naked shorting is when a market maker or hedge fund sells stock that he does not own and/or has not borrowed. The trade is ex-cleared through the DTCC/NSCC wherein money is exchanged for a "phantom" share that is represented by a number in the investor's account, when in reality, the share(s) do not exist.

Its likened to writing a check for cash, getting the cash, but the check never settles and the banker never demands settlement. How many "hot"checks can you write, cash them, before the District Attorney picks you up and puts you in jail? It doesn't take long for the banker to notify the District Attorney to pick you up and put you in jail if you don't "settle" your "hot" check.

Naked Short Sales is just like writing a "hot" check, that never settles, as a matter of fact, it never settles and the market maker/hedge fund keeps the money and never faces any legal ramifications because the SEC has not implemented the reference rule to end naked short selling. Is it any wonder the U.S. Banks are facing $515 Trillion derivatives that have to settle, with Basel II, since market makers/hedge funds can no longer "mark it to fantasy" it has to be marked to market and be counted. Naked short selling is the a big factor in the global 730 Trillion Derivatives that are causing havoc globally, this rule must be implemented ASAP.

STRENGTHEN IT: This rule is imperative that it be adopted immediately. Furthermore, the rule should be strengthened to clearly define monetary penalties with jail time if any entity is found selling naked shorted shares of stock, which in reality are counterfeit shares of a security. This rule needs "teeth" that will set forth penalties that will clearly deter market makers/hedge funds from selling "naked" shorted shares in the marketplace.

Never in the history of this great nation has it been legal to sell something you do not own. The SEC has allowed naked shorting in the market place and it must end NOW. A good example of huge naked shorting in a security is CMKM Diamonds, Inc. (CMKX). The shareholders of CMKX did a certificate pull, proving a huge (in the trillions) naked short in that security. It's past time for the SEC to take charge of this corruption and clean up the market place, the financial backbone of America.

Thank you SEC for taking immediate, corrective action in this matter.

Janet Douglass
Founding Father