Subject: File No. S7-08-09
From: Robert D. Tollen, Ph.D.
Affiliation: Emeritus Professor, University of Texas at El Paso

June 3, 2009

We must reinstate the Uptick rule and forbid naked shorts. Current hedge fund strategies involving massive short positions are not about price discovery, rather they are about price manipulation. They seriously contribute to market instability, without economic purpose or rationality.

As Keynes observed in his General Theory, "But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done." (Chapter 12)