Subject: File No. S7-08-09
From: George P Boyer

May 9, 2009

May 9, 2009
Dear SEC Committee Members,

I strongly urge the SEC to RESTORE the original UPTICK Rule.

I sincerely hope that you will consider my personal story and comments herein before you make your decision.
I am an individual investor who has relied on dividend income from my stocks to support me and my family for many years.
I have personally lost 65% of my portfolio value as of today, May 9, 2009 since January 1, 2007. Most of this has been caused by the disruption in the markets and the volitily caused directly by the elimination of the UPTICK Rule. I have been fully invested in stocks continually since 1995 to support my retirement. I have never witnessed so much volitility such as the rise in the VIX since shorting rules were changed in 2007. The SEC knows this point, I hope. The VIX index peaked in November 2008 more than double previous records. This volitily effect on my portfolio was directly caused by the emergence of brand new and very inventive stock SHORT funds that allowed and attracted the common investor to short the market in general or in specific stock categories. The emergency of ultra short targeted funds gave common investors the ability to benefit 2X or 3X in these short selling funds. The elimination of the UPTICK Rule fostered a culture of novice investors, newsletters, commentators that thrive on generating negative news and fostering general negativity to drive prices of stocks down using rumors or false or inflated facts.
Since 2000, I personally invested heavily in Real Estate Trusts (REITs) and various dividend paying stocks and I still do today. It used to be a very stable business with a low amount of price volitility (generally half the volitility of the SP 500) until huge amounts of shorting in real estate stocks started in 2007. By its peak in November 2008, my stock accounts (still invested in REITs) had fallen to a low of 85% from January 2007. I tracked many Short Funds that targeted REITS including Proshares with ultra short funds such as SRS that also peaked in November 2008. I could not believe that they would be good investments themselves since the underlying business of commercial real estate was one that I thought was strong and still do.
Since November 2008, the ultra short funds have fallen sharply as well as the ultra long funds that targeted Real Estate. These ULTRA funds are scams and clearly do not foster long term investment. They only work if you invest for a few hours and pull out. I think you should understand that individual holders of ultra short funds are hurting as well today. They still are hoping for the collapse of commercial real estate so they can recoup their losses as well. Yes this is crazy and you must know it. Long term holders of the ultra long (URE)) or ultra short (SRS) real estate funds have both lost money due to the craziness of how these funds work.
For example, as of today, the Ultra Long Real Estate fund URE is trading 13% below its 200 day moving average. The Ultra Short Real Estate fund (SRS) is trading 75% below its 200 day moving average. So if you bought either one long term 200 days ago, you lost money. These funds are costing individual investors money and they rely on the fact that the uptick rule was eliminated in 2007 by the SEC. You have not done well by the individual investor and many that I know of, no longer hold stocks because they have lost faith in the stock market in general.
I also do not agree with the practice of naked short selling and I do not ever want my shares to be used by short sellers against me. I also believe that if stocks are shorted and not delivered, a crime has occurred that the SEC should prosecute. I suspect that my broker borrows shares from my account for short sellers to use. That should also be eliminated if this occurs. What investor would ever want his own shares of stocks to be used against him by a short seller without his own permission? If this is being done, the SEC must stop this.
But without a doubt, the SEC has cost me and my family the majority of my retirement fund because the SEC eliminated the UPTICK Rule. I believe it was unintentional but you did not listen to individual investors before making the change as you are NOW. Yes, you are responsible and I want you to restore this reasonal rule EXACTLY as it was prior to 2007.
You may be fooled in thinking that because of the recent rise in the stock market, that there is no need to restore the UPTICK rule. DO NOT BE FOOLED. Many investors today are losing money this Spring by short selling and have gone to the sidelines. They will be back with a vengence that will astound you as short funds will invent even more levered 2X or 3X or 8X short funds. Once you take away the UPTICK rule, there is a tremendous amount of creative invention that can be focused on new ways of short selling.
In summary, we need the UPTICK Rule restored, exactly as it was before 2007, to return volitility to historic levels and encourage long term investoring by building confidence that stock values represent the underlying values of the company's profitability and balance sheets.

Thank you,
George Boyer
Ft. Myers, FL