Subject: File No. S7-12-06
From: Henry Jay

September 19, 2006

The SEC has purposely allowed major loopholes to exist in Reg SHO and to whose benefit ? Certainly not that of mom and pop shareholder. The SEC's lawyers, intentionally ( aiding and abetting ? ) or otherwise ( incompetent ? ) created a "rule" that's full of so many holes, exceptions and exemptions that it's just so much legal swiss cheese facilitating the cheats running the Wall Street short selling scams. Naked Shorting in and of itself is illegal according to 1934 Securities Law and yet the SEC has the gall to grandfather this illegal activity ? Since when is breaking The Law a protected right ? The SEC seems to be more aligned with protecting the perpetrators from the financial responsibility of being forced to deliver the shares that a shareholder has purchased . The SEC seems to be more aligned with protecting the perpetrators from the risk they take in breaking securities laws repeatedly and maliciously. The SEC seems to be more aligned with protecting the perpetrators from undue volatility ( potential short squeezes when forced to cover illegal trading positions? ) while exposing long shareholders to outright manipulation at the hands of organized criminals. What the SEC must do is to punish not only the perpetrators but their facilitators as well, the aiders and abettors that purposely circumvent the rules to keep the Naked Shorts active and going. What the SEC must do is to publish the FTD data in its entirety which means full exposure of the offending parties and their positions on a daily basis. In this day and age of computerized automation there is no excuse for failing to do so. The SEC has so failed in its fiduciary duty to the investing public that, as a consequence, some states are now forced to pick up where the SEC has failed due to the outcry from the investing public.

The SEC must also do something about its bias towards protecting "legitimate" short sellers. Why isn't short interest reported on a daily basis ? All short trades are marked as such, NASDAQ and the exchanges have no problems with providing daily trading figures, why can't they provide daily short interest statistics ? Why protect the short sellers at the expense of shareholders who are long ?

And the SEC should also demand more timely institutional trading data Why is it that the quarterly reports can be as much as 135 days out of date by the time they are reported 45 days after a quarter ends ? Why not have reports delayed by only 3 days or maybe a week at most if the farcical argument of protecting trading strategies is to be introduced into the mix ?

So where's the level playing field for all shareholders that the market should be ? What will stop the nefarious greed running rampant on Wall Street ? Stiff fines that hurt where it counts, in the bottom line, and criminal prosecution are the only penalties that will stop the current crop of manipulators. Fines and consequences that are more than a wrist slap - forfieture of all gains, triple the amount in fines and criminal investigation of the participants.

I hope the SEC's top officials will do more than pay mere lip service to the investing public since it is YOUR ACTIONS THAT SPEAK VOLUMES. It's high time that the SEC start to WALK THE TALK.