Subject: File No. S7-08-09
From: Joseph Giancola
Affiliation: Retired

May 8, 2009

Mary L Schapiro May 8, 2009
SEC Chair
100 F Street, NE
Washington, DC 20549
Subject: Comments on File Number S7-08-09 (Proposed Rule Release No. 34-59748)
Dear Ms Schapiro:

I have been employed in Engineering and Science fields of design, development, and research for over 30 years. I have B.S. in Engineering Physics from Saint Josephs University and M.S. in Physics from University of Delaware. For the past approximately 15 years, I worked as Sr. Software Analyst, Sr. Computer Programming Analyst, and Sr. Software Engineer. For several years prior to retiring in 2002, I performed part time Stock Trading using online broker(s) and Wizetrade Trading Program. In 2005, I started performing day trading of stocks full time. I was successful in obtaining favorable capital gains during 2005 and 2006, however, I found it very difficult to make profitable trades during 2007, 2008, and 2009 because I could not compete with the Hedge Funds using their software programs, with no uptick restrictions. During these years, Hedge Funds have driven the stock price of many companies down using short selling and naked short selling. Such techniques should not be allowed for trading of public securities. The Hedge Funds love these techniques because it gives them advantages in trading stocks with unfair control and leverage. In addition to the credit default problems, I firmly believe that these techniques significantly contribute to the demise of the stock market and cause excessive volatility. During 2008 and 2009, I experienced two company stocks shorted into Chapter 11 and lost a significant amount of money. I am confident that many investors, traders, and financial institutions would bring extremely large amounts of money back into the stock market if a Market Wide, Permanent Approach Uptick Rule is made a law with significant monetary fines and prison penalties for violations. I believe that a basic rule/restriction of this type which performs a market-wide sale price test based on the last sale price/tick of any stock is necessary to restore investors trust in the stock market. I have not seen the details of the original/traditional uptick rule for short selling but my understanding is that it worked and I believe it should be reinstated to prevent Hedge Funds from controlling stock prices and driving them down. To insure that such a law is enforced, you may need to hire a qualified software analysis/development company to perform audits of all relevant Hedge Funds to make sure that their trading programs incorporate the required software tests.
Thank you for this opportunity to provide my comments on this matter.
Joseph Giancola