Subject: File No. S7-08-09
From: Donald N Cave

May 14, 2009

A bonafide owner should have a senior position in a sale condition in the market. A short seller has no position to sell from and therefore no inherent rights, shares from thin air. By allowing a short to undercut an owner's bid, his property rights are denied in favor of a ficticious holder thereby creating a self fullfilling action of pushing a stock lower. Excess selling appears on the market giving or amplifying the impression of a run.

Please save the market from total collapse by adding back the uptick rule and putting in a circuit breaker. Naked shorts need to be stopped dead. Short sales dilute a stock by the very existence of action. Borrowing shares from a bonafide holder degrades his stock interest and at the same time uses his shares against him without even a compensation for the borrow. I call that aggravated robbery.

Please note the coincidence of the removal of the uptick rule and the decline in the market. Even with uptick, the stocks can be hammered down methodically.

There is no constructive investment activity in a short sale.