Subject: File No. S7-12-06
From: Karl Schreiber

February 4, 2007

The Honorable Chris Dodd
Washington, D.C. 20510

cc:SEC re: Comments on File No. S7-12-06
Amendments to Regulation SHO

Dear Senator Dodd,

I am writing as a citizen of the USA who is very disturbed with the unfairness of our securities markets. I read in your 18 Jan. 2007 speech to the Banking Committee that you want to: 1-keep citizens and business secure against attack from terrorists and 2-expand prosperity for business and consumers.

These are very worthy goals, but work best when there is a strong and honest stock market. Though it may not be evident to you, there are some market participants that are not playing fairly. They are, in fact, destroying the confidence of the small retail investor and small companies as well. Overstock .com is one of those targeted companies and has just filed a $3.5 billion lawsuit claiming that ten Broker Dealers and others are manipulating their stock. It is pretty obvious that something is wrong when Overstock has been on the SHO list for 400 + days. Of course, this is only one of many companies being similarly terrorized.

As the Chairman of the Senate Banking Committee it is in your power to open hearings to find out why the SEC is allowing this to happen. After the 1929 crash, the then Congress passed the 1933 and 1934 Security Acts to try to ensure fair markets and restore investor confidence. Since that time, the SEC who was tasked with over sight has continually made rules that have favored Wall Street at the expense of the small retail investor.

Case in point is the current SHO rule where in trying to address the Fail To Deliver problem the SEC actually made matters worst by grand fathering fails before a certain point in time. This grand fathering was added at the request of the Self Regulating Organizations without public comment. Realizing their mistake this past year the SEC requested comments on eliminating the grand father clause. Comments were to be closed in the fall and there was to be a decision I believe prior to the end of 2006. However, comments on this proposal are still being accepted with no decision yet.

Even when the SEC does sensor someone for a miss deed, it is often without them admitting guilt and the fine is seemingly small compared to the damage done. It has also been reported that the SEC isnt sure if the fines have even been collected. Seldom do we hear of any case being forwarded to the Department of Justice for criminal prosecution. What the hell is going on? Can't we get the criminals out of our markets and behind bars?

With some companies having many more shares in the market than they have issued, it is no wonder that Wall Street is reporting ridicules profits. Those profits didnt come out of thin air; they came from the small retail investor through unfair practices by the Wall Street elite.

In the opening session of the 110th Congress House Speaker Nancy Pelosi said, "The American people told us in the election that they expect us to work together for fiscal responsibility, with the highest ethical standards and civility." I hope that these feelings are pervasive amongst your fellow Congressmen and women and that these same feelings spill over into how they monitor the different agencies for which they have over sight.

There has been some talk in the press about small companies fleeing our markets because of Sarbanes-Oxley, but it appears to me that many of these companies see no integrity in our markets. With the rampant manipulation by Wall Street, they see that they have no chance to survive on the merits of their business, or products. Thus they look elsewhere. The solution is to level the playing field; regulate the Hedge funds and enforce market regulations.

We have a corrupt market, which if not fixed, will drag our nation into the gutter with it. Please ask questions, hold hearings, and see that a special prosecutor is appointed if that is what it takes to clean this mess up.

Thank you,
Karl Schreiber