Subject: File No. S7-12-06
From: Ben Landry, Mr
Affiliation: Accountant

August 16, 2006

The SEC mission is to PROTECT INVESTORS, maintain fair, ordely, and efficient markets, and facilitate capital formation.

That mission to protect investors is a big joke when SEC permit grandfather clause, NAKED SHORTHING, options on NAKED SHORT roll over indefinately.
Asking report on mutual funds to be public and nothing for the Hedge funds.

The Reg SHO list shown that there are a significant amount of failures to deliver that are never corrected: Ovestock (OSTK), Martha Stuart (MSO), Fairfax Financial (FFH), Novastar Financial (NFI) etc.Those corporation are on that list since the beginning, January 5, 2005.Is it normal, is it a joke or what Failed to deliver= FRAUD.

Company will hesitate strongly to go public if the SEC do nothing about that(IPO will go down) PLUS the whole system is defrauding retail investors and it will create the mother of financial crisis one of these days.


I am strongly recommend amendments to Reg SHO:

1.Eliminate the grandfather clause (If they did not do anything since January 2005, they never will) 2.Make it mandatory for all short sales to first borrow (Not just locate) real shares prior to executing a short sale
3.Eliminate any and all possibility that the same shares are available for borrowing to more than one broker/dealer or others.Ensure there can never be more shares in the system than the authorised issuing of the company.
4.Establish big penalty on NAKED SHORT SELLING and COUNTERFIETING of shares.
5.Make Failed to deliver (FTD) data for all stocks on an individual basis available at the same time to the public.
6.Settle all trades within 3 days, buy in Failure to Deliver (FTD) on day 4
7.Audit the stock loan program of the DTC/DTCC ans all its subsiduaries and establish oversight to assure settlement accuracy and detect and prevent the hiding of over-voting of proxy shares.

The current system is broken and just say that NAKED SHORT SELLING do not exist is very hypocrit and bad for the market.

Thank you for the opportunity to express my comments and I hope you will eliminate NAKED SHORT SELLING as soon as possible for the good of your mandate.