Subject: File No. S7-12-06
From: Michael J. Kress, CPCU
Affiliation: Independent Consultant

August 7, 2006

- Naked Short Selling/Strategic Failure to Deliver in the U.S. equity market place is:

__ A clear violation of the SEC Act of 1934

__ A Fraud on the American Investing public

__ The cause of the demise of hundreds if not thousands of small American companies

-- A likely means of money laundering for terrorists and narco traffickers.

Quite simply put, the SEC should fufill its primary mandate to protect the American investing public and eliminate ALL prior grandfathering under the previously passed Reg SHO and enforce mandatory "buy-ins at T+3" and clean up the marketplace.

The U.S Senate passed the SEC Act of '34. How does the SEC override the Senate in grandfathering clearly illegal, prohibited activity?