Subject: File No. S7-08-09
From: Robert Ploder
Affiliation: CFA Institute, AICPA

May 5, 2009

Dear Sir or Madam,

I have been an investment professional for over 40 years. I have been a recognized security analyst, director of research, portfolio manager, manager of managers and a personal investor.

I think we all recognize that constraining short selling merely postpones the inevitable if, in fact, a stock is going to decline. In such a case, constraining short selling simply means the new owner has been disadvantaged by paying too much and the seller has received an advantage. The market works best when buyers and sellers are paying a fair price. We don't constrain rising markets, we shouldn't constrain declining markets.

I, along with many others, lost a significant amount of money in 2008. I don't blame short sellers I blame my lack of skill or judgment.

However, on the way down, I decided to be flat to the market. That is, be short in an amount equal to my long positions. By so doing I could try to make some return by identifying under- and over-valued securities (at the same time perhaps helping the market provide fair prices to individual securities).

This was frustrated in part by the inability to short financial securities during 4Q08. I found I was unable to "hedge" my portfolio. It cost me money. I wasn't trying to put any company out of business I was simply trying to be flat to the market. The inability to short except on an uptick would also have constraining effects on properly hedging a portfolio.

Please recognize that by constraining one's ability to appropriately short securities can, and will, cost individual investors the ability to properly hedge their portfolios.

I ask that, in any rule change, please make sure that the average individual investor can still participate in the market by offsetting his or her long positions with properly-acting short positions.

If we want to eliminate abuse, I strongly suggest we first eliminate naked shorting of physical shares not borrowed. This, to me, would seem much more effective and fair than an artificial price constraint on short selling.