Subject: File No. S7-08-09
From: Michael Lamanna

June 17, 2009

June 17, 2009

Madam Chairman and Commissioners:

Please consider the following time line and comments in your upcoming decision on how to remedy the removal of the uptick rule.

For a person of reason and understanding, the following time line is all that is needed to illustrate the corrupting influence the removal of the uptick rule has had on the financial markets and the speed with which the damage will be repaired if the right action is taken.

July 6, 2007 - The SEC eliminated the uptick rule.

July 13, 2007 - The Dow Jones Industrial Average began plummeting. (To argue that the Dow peaked in October of 2007 ignores the idea of a retest and attempts a biased analysis of the price behavior where certain environmental factors are considered and certain other environmental factors are ignored.)

March 09, 2009 - The Dow Jones Industrial Average reached it's lowest level in 12 years.

March 10, 2009 - Mary Schapiro told lawmakers that she may restore the uptick rule. The Dow Jones Industrial average rebounded by approximately 5% and been on a continuous rise ever since.

The actions and reactions of this simple time line are too coincidental to be considered mere chance.

It is not clear whether the short sellers have been less aggressive since March 10 (possible motivations for this could be attempting to sway public opinion and the SEC decision by temporarily cleaning up their behavior or a fear that they might get caught with their hands in the cookie jar if the rule is reinstated) or if the potential reinstatement of the uptick rule has inspired a renewed confidence in investors but it is clear that the removal of the uptick rule had a negative impact on the value of the market and the potential return of the uptick rule has had a positive impact.

Opposition to the uptick rule seem to base their arguments on the ideas of improving market liquidity, creating a level playing field for different types of investors, and attempting to show that, since the change in the pricing format to the decimal system, the rule had no real impact on the markets.

As far as market liquidity goes, increased liquidity does not help the market in its current state and even has the power to destroy it. What we have in the current market is an environment that has grown beyond the need for added liquidity. Even if short-selling was eliminated completely, there would still be more liquidity than is needed to sustain a healthy financial ecosystem. Put simply, adding liquidity to the market in it's current state is like encouraging the melting of the polar ice-caps.

To the level playing field argument little needs to be added that has not already been said by proponents of the uptick rule. But one point that should not be forgotten is that when considering the idea of a level playing field, the powers of fear and confidence and their ability to impact the market in far-reaching and potentially devastating ways should not be ignored.

For those who claim that the uptick rule had no real impact on the modern market, the only evidence needed is the above time line. Whether it had a direct impact or contributed a level of confidence is unimportant. The facts of history speak for themselves.

In considering how to remedy the current situation, the following should be included as a guideline:

The general public has a much more direct effect on
the market than they have had in the past and no
market will ever be healthy if those who have an
effect on it don't have confidence in the potential
stability and the accuracy of the movements of that

It should also be noted that circuit-breakers will not work because the fear that is created in long-investors before the rule engages will carry over in long-selling and a lack of long-buying after the rule engages. Effectively, a circuit-breaker will still allow short-sellers to do the damage they have been doing through manipulation of fear and confidence for the last two years.

For all of the reasons stated above, I would like to encourage you to move in the direction of following through on either the proposed uptick rule or the proposed modified uptick rule.

Michael Lamanna
Individual Investor
Citizen of the United States of America