Subject: File No. S7-08-09
From: Kurt Meister
Affiliation: Individual Investor

June 18, 2009

I am an individual investor, and I am OPPOSED to all of the proposed changes. If you adopt any of the changes, reinstating the uptick rule would be the least objectionable. However, I hope you at least provide an exception for Market On Close orders, which must be committed long before it is known where a stock close or how it will trade immediately before the close.

Investing provides almost all of our income. I use short sales as a way to make money during bear markets and as a way to stay market neutral during the many periods when the market is not trending in either direction. Adoption of any of the proposals could result in my investment income being less certain when the market is not trending and keep me from having enough income to live on during bear markets.

I believe the only effect of the proposed changes will be to further tilt the playing field in favor of large institutions and professional traders who have access to derivatives and other products which would give them the benefit of a short sale without violating the rules. I have no doubt that before any final rules are adopted, new instruments will be created for large institutions and professionals to circumvent the rules.

I realize the SEC is under pressure to prop up the stock market, and short selling is often cited by incompetent CEO's, whose companies lose billions of dollars, as the reason their stock is going down. Unfortunately, I don't think there is any evidence that short selling causes a company's stock to plummet. Most of the time, the reason is that the company announces horrible earnings or some other catastrophic event. In those situations, it is often impossible to find shares to borrow in order to sell short. Therefore, it is the lack of buyers, not short sellers, that causes the stock's price to drop.

If I were to short a stock whose fundamentals and prospects are good, I would lose my shirt. I have never seen a bear raid on a good stock. However, I have seen short squeezes where not only do buyers try to artificially inflate the price of the stock, but add to their power by no longer making their shares available to borrow, forcing short sellers to cover. If you are concerned with market manipulation, short squeezes are much more manipulative than bear raids.

I realize many consider it unpatriotic to bet that a stock will go down in price. It isn't unpatriotic, just realistic. When events like the global credit crisis unfold, many investors have been brainwashed by mediocre brokers and portfolio managers to not try to time the market and hang on to their stocks, suffering tremendous losses. Others adjust their portfolios to preserve their capital and even make money.

Neither markets nor stocks always go up. I believe that markets are rational. Restricting short selling will not cause stocks to go down any less than they would with short selling. Unless you can figure out a way to keep bad companies from doing stupid things, their stocks are going to drop.