Subject: File No. S7-08-09
From: Bill Schraeder

May 5, 2009

While I am adamantly opposed to short selling restrictions, I realize that the average lemming investor that listens to corrupt Wall Streeters and their supporters like Jim Cramer will likely overwhelmingly write in favor of restrictions. In most cases, it is simply because they are misinformed.

As someone who has watched in horror over the past 20 years as the criminal manipulators on the long side bilk investors out of their hard earned savings, I find it incredible that we are even having this discussion. If the SEC would prosecute the real criminals that disseminate false information to defraud the public, we would never have had a bubble in the first place. Wall Street as I define it includes corporate management, the media, and even corrupt government officials. Each of these groups has pervasive corrupt elements that continuously spew false information out to the public for their own benefit. Moreover, they frequently take large positions in stocks, and then deliberately hit the ask on small transactions after huge news releases while unloading huge blocks to an unsuspecting public. While I could write a book on the massive fraud that takes place every day in our corrupt markets, the fact is the main culprit of corruption is those who favor the long side of the trade. Short selling is the only governor we have to moderate the widespread corruption that exists in our markets. If the SEC votes in favor of the corrupt elements of our society and chooses to place restrictions on the true patriots---short sellers, perhaps the SEC should also consider the following:

1) Place restrictions on buying long. Long purchases can only be made on downticks. Sounds ridiculous right? No different than what is being proposed on the short side. It is a market. Why should the rules favor the majority---market manipulators whose only goal is to pump their shares so that they can dump them on an unsuspecting public? The shorts tell the truth a lot more than the representatives of the majority of our corrupt institutions and the government does nothing about it ((campaign donations, friend of a friend deals, etc.)

2) Put corrupt market cheerleaders who use the media to pump and dump shares in jail. Start prosecuting unusual option buys and sells before major market news events. Start prosecuting aunts, uncles, and other family members who trade based on tips provided to them from their media friends. Start prosecuting corrupt government officials who leak information to their friends on the street and then share in the winnings.

3) Investigate the media for their repeated pump and dump schemes that cause millions of investors to lose their hard earned savings to the corrupt corporate elite and their friends.

While the issues listed above are only a small sampling of what the SEC SHOULD BE doing, what they should not be doing is placing restrictions on the few realistic people small investors have out there to keep the markets honest. While I recognize there are more investors on the long side than the short side simply due to human natures optimistic outlook, the fact is when viewed as a percentage of each category, corruption predominately exists on the long side. I also realize that the SEC is a political body, therefore, it is inevitable that the SEC will do what is politically expedient and in their own best interests and those of their friends. It is just so unfortunate that the average investor is not being told that the short sellers are their only hope of getting a fair trade---without short sellers, the longs will have unfettered license to pump and dump for their own personal gain.

The optimist in me hopes that the SEC will not kill the only governor we have left to monitor the widespread corrupt behavior that exists in our markets unfortunately, the realist in me recognizes that the SEC will likely go along with Jim Cramer and his ilk and pass short selling restrictions simply because it is in their political best interests to do so----it is the corrupt longs that get our politicians elected and the SEC is an extension of that. Just realize that while it may look good in the short run for the SEC politically, an honest democracy can only be found when all participants voices are heard----once you kill off the honest short sellers, the dishonest longs will have unrestricted abilities to defraud the public of their money. Since market fraud is rarely punished, our only hope for an honest market lies with the short sellers-----chase them away and corruption will be so widespread the markets will collapse and it will be generations before people come back.