Subject: S7-08-09

June 5, 2009

We are told that the reason investors can sell stocks that they donít own (short selling) is because this is the markets mechanism to reduce an overvalued stock to its real market value. If that is what it was being used for; it would not be a problem. However, the short selling of stocks has evolved into uses never contemplated in its beginning nor understood by the investing public today.

Wall Street has learned that computer generated buy and sell (short) programs have the capacity to overwhelm the entire stock market up or down. This ability allows them to manage the direction of the stock market and generate enormous profits for themselves.

Now that America uses the stock market for retirement and savings it is time to make substantial changes to how short selling can be used, if at all, in our equity markets. A whole generation has lost 40 to 50 percent of its savings for retirement. Even the experts were dumfounded. This is unconscionable. I am not suggesting changes to all the other rough and tumble markets but our equity markets should be operated conservatively and safely.

Restoring the up-tick rule is a good first step. The SEC needs to make many more changes to short selling in our equity markets to protect the unsophisticated investing public. Cliff Lindroth, San Diego, CA