Subject: File No. S7-08-09
From: Derick Rodriguez

May 5, 2009

We need to stop abusive short selling entirely. An uptick rule is not going to completely fix the problem. There needs to be physical ownership of stock/security before it can be sold.

This was and still is a problem in the Credit Derivative market in which banks were buying insurance on bonds they did not own. In the end the principal amount of protection on bonds in a given company far exceeded the actual amount of available debt in a company (see auto makers such as Ford, and GM in the past three years for example).

These kinds of transactions effectively make negative statements about companies in the market and is encouraged by the fact that it ignores any real ability to fulfill them. This is abused to the extent that it will destroy other companies for corporate profit. The perfect example of such a victim is Bear Stearns which was shorted almost completely out of existence prior to its purchase by JPMorgan.

We must impose an ownership requirement. There is no better way to stop dramatic decreases in stock price than to force a seller to own the stock first. Allowing naked short selling to occur is akin to allowing other countries to print US dollars giving them the ability to destroy the value of American currency. It is illegal, incredibly unethical and must be stopped entirely.