Subject: File No. S7-08-09
From: Robert Pulliam
Affiliation: Small Investor

February 20, 2010

Short selling in any form is nothing more than illegal theft of "value" from holders of the stock being shorted.

The short selling scheme was devised by brokerage houses and investment bankers as a ruse and an avenue to reap more commssions from stock transactions -- as well as a way to make interest from the "margin account" loan activity so necessary for short selling.

When this criminal scheme was concocted, regular working folks were not investors. It, like the commodity markets, was nothing more than a "gambling game" played by the rich and powerful amongst themselves.
However, with the advent of IRAs, 401Ks, Mutual Funds, and all other manner of retirement accounts available through a person's employment, almost every working American (as well as the vast majority of retirees) has hard earned money invested in stock or commodity markets. The SEC should make an ironclad regulation outlawing short selling in any form.

Pontifications such as "Short selling makes for efficient markets" are ludicrous. If someone thinks a stock is "overpriced" then all they have to do is not buy it. It's no big secret that stocks are ultimately valued by the price that a "buyer" is willing to pay. If there are no buyers, a stock price will go down --- to a price level that buyers deem to not be "overpriced".

This is no different than anything else bought or sold. If folks think that any item or product (from food and clothing, to automobiles or real estate) is overpriced, they simply make a decision not to buy it -- or to buy another item or product at a cheaper price. Thus one can choose to shop at WalMart or Saks -- or not to shop at all.
Stocks and commodities are truly no different.

For the SEC, or any branch of government, to condone a practice which is nothing more than stealing from folks retirement funds, mutual funds, IRAs, etc. is not only beyond comprehension, but illegal and unconstitutional.
This criminal practice should never have been allowed to flourish and needs to be stopped now.
To anyone who was actually paying attention, the finacial market crash and current economic problems are partially a result of rampant "shorting" and particularly "naked shorting", of stocks, commodities and all other manner of shady derivitive activity.

Thank you.