Subject: File No. S7-08-09
From: Bernhard Grosser
Affiliation: I.A.R. Woodbury Financial Services

October 2, 2009

During the market run down from 9/07 - through 2/09 it had been noted that naked short sales where on the rise. Having a securities license in addition to working with-in the securities industry dating back to 1983 I had always known that this was an illegal act, at least when it comes to the Series 7 books.

However, I had not heard of any legal actions being taken against persons or institutions that had done this very thing during the crash. As far as I know this country does not have double standards. The rule on short selling has always been to my knowledge that the person/persons placing the short sale is "supposed" to be covered and not naked.

One should never be allowed to sell something that they neither hold nor have an agreement to borrow. In the banking world "kiting" is also illegal and is strongly enforced.

In closing, I also happen to agree to the up-tick rule. During the 80's crash this had been brought in and seemed to have helped deter any violent moves in the market at the time. If I recall correctly this had been something that was thought up by a few CEO's within the brokerage Industry when requested by the U.S. President to meet with him. One of those persons had been my CEO when I had worked for Charles Schwab Co., Inc.. When we had been informed of the idea at that time most everyone had fully agreed that this was a great idea. Why it had been stopped or ignored during the current crisis confuses me.