Subject: File No. S7-08-09
From: Nicholas Tzoumis, Mr.
Affiliation: None - Ordinary Retail Investor

May 9, 2009

President Obama has stated that he wants to govern in the best interests of ordinary people and maintains that rules and regulations or lack there of must take into account how they affect ordinary people (in a positive manner) within their day-to-day lives.

Over 70% of people own stock in some form or another and mostly in long positions. A major growing proportion of these people are now ordinary retail investors and have individual or joint broker accounts directly. In almost all cases, there is no transparency as to the mechanics of the markets readily available to any of these many millions of ordinary people.

This is why the short sale rule and its specific re-implementation are so critical. We expect the SEC to recommend and succeed in an implementation that follows the spirit of the rule and the Presidents explicit governing desires.

Within this clear and obvious dictate, only a reversal to the exact short sale rule in place prior to its expiration is the sole option that realistically achieves this mandate and governs in the best interests of ordinary people.

Many recent changes to the markets operations cannot and must not be impediments to the rule changes, since almost exclusively those so called market improvements only serve large money investors that wish to keep their intentions private, something ordinary investors cannot do.

For example, the breaking up of trades to multiple markets as an impediment to restoring the original rule, neglects to understand that this behavior makes even those that work hard in an attempt to understand and learn what should be open and transparent find that even level II quotes are worthless in regard to transparency. Big money traders use that mechanism to hide their execution intent by breaking the trades into small lots that are impossible for any retail investor to decipher.

If they want to keep this hidden advantage then they must wait for an uptick on every market that executes any portion of the trade, at that time. No exceptions. This will also change the behavior of swaps used to manipulate the markets by effectively allowing leverage beyond the limit of ones actual marginable securities.

We know these products make a lot of money for financial companies on the nickel of the ordinary investor alone since there is no regulation or rule in place that enforces products to live up to their marketing messages whatsoever.

Essentially, a financial product can say a security will perform double an index but if it does not even come close to doing so there is no penalty, or removal from the markets. This is due to inappropriate use of standard mutual fund disclosures used in less volatile long only funds that invests in large cap stocks not achieving its goals, for example

Even RegSHO is a failure since it is out of date and meaningless since a retail investor cannot easily keep naked short positions and does not have some opportunity to unwind a naked position over any time frame they wish, if ever.

We beg that you as the SEC do not buckle under the immense interests of those that simply wish to keep other mechanisms in place that are just as egregious, dangerous and adverse to ordinary people as a reason not to reinstate the original rule. Using alternative tests will actually continue to alienate the ordinary retail investor and add another disadvantage to this litany of disadvantages.

If certain market adjustments are necessary to purify and simplify a regulation, so be it. We will all be better for it. We the people are paying attention to actions by agencies and how they affect ordinary folks.
We urge you to reinstate the original rule and let the market mechanisms adjust, as they always will. Every unintended consequence stated as an objection actually helps the ordinary investor. This is amazing.

The objections and alternatives to the original rule are all red herrings thus far and will make a bad situation even worse for ordinary people.