Subject: File No. S7-08-09
From: Paul C Donohue

May 5, 2009

The purpose of markets is to allow and promote the formation of capital for business enterprises. Allowing short sellers to gang up on stocks by way of unlimited hedge fund short selling or gang-up tactics by all short sellers is counter-productive to the purpose of markets and needs to be held in check. Both the uptick rule and circuit breakers rules would help in this endeavor and should become part of the framework of keeping the markets fair and in-line with their intended purpose.

Naked shorting should also be eliminated by requiring that shorts actually borrow the stocks they are short-selling before they act. Longs are not allowed to buy stock without having or borrowing the money before they make their buys. A level playing field would require shorts to also have actually borrowed any stock before they sell it short.