Subject: File No. S7-08-09
From: Charter Harrison
Affiliation: Investment Advisor

May 8, 2009

This period will not be known as the great recession but the great shakedown. The destruction of wealth in mainly smaller investor accounts will deter risk taking and investment for years to come. This has permanently stunted our growth for a generation. In the 30's this lead to world war II.

I believe that one of the principal reason for the cascading decline of the markets starting in the summer of 2007 when new short selling rule were enacted. These changes gave naked short sellers more tools to destroy the economy and created liquidity crisis.

Credit default swaps play into this as well because institutions that sold the credit insurance (yes that need regulation too) naked shorted the stocks as a hedge.

Hedge funds piled on increasing the shares or supply of stock that pushed the banking stocks to the brink. In the same quarter Wells Fargo made record 3 billion in earning their stock went from 29 to 8.

Naked short selling combined with disinformation is market manipulation. Please see

For those poor should who sold their wells Fargo at 8 and with the stock now at 25 may have been wiped out. My father has a good portion of his retirement in Wells Fargo at a low cost basis he was very close to selling out.

The Fails to deliver stock in Dendreon in 2007 and most likely now has kept a life saving cancer vaccine from getting properly funded.

My wife is in Biotech and because the naked shorts know these companies will be in need of cash in the future they naked short the stock and put them out of business. Millions of people will die because the lack of capital in biotech.

The amount of stock that can be shorted should be fixed at 30% of the float. Faller to deliver stock should be penalized at 100% of the value of the trade. Proceed should to pay for more and better regulators of the market and investor education.

Liquidity is not a good reason for naked short selling. You are simply destroying wealth and the higher valuation the security should have been worth because of the demand for stock.

Naked short selling is counterfeiting. Do you allow counterfeit dollars to be used to pay for the purchase of stock?

PS so the Banks stress test was leaked days before the official release. Is this not dissemination of insider information?

Are you regaultors caputured as well? Are hedge funds and large endowments your best friends? I and the public wonder.