April 4, 2007
Martinez California, March 27th 2007
Regulation SHO and the illegal Grandfather Clause.
To Chairman Cox.
Extending the comments period again? What a joke
The SEC under your leadership appears to be completely gutless when it comes to taking tough decisions. (Especially when it comes to protecting the small investor.)
I find it shocking that the SEC has continued to allow the investing public to pay their hard earned cash for stocks and receive nothing in exchange for those funds. When investor's receive naked shorted shares in exchange for their cash, they get markers indicating a position is held. The electronic markers that are put in their accounts representing shares, are not stock. The price of the underlying stock is almost certain to go down in value as long as the selling parties do not have to deliver stock.
These trades should never settle, if stock is unavailable. This is systemic fraud at it's worst. Aided and abetted by the SEC, the DTC, the FED, and the banks that sit on their boards. The politician's who should be calling them to task appear to be compromised by either having their campaigns financed by the banks, or by living such depraved lives that fear of exposure buys their complicity. They have given lip service to helping the investing public get a level playing field but they have clearly done nothing to end the abuse by those in power. Wholesale thievery that has flourished under the watch of the SEC and the Senate Banking Committee, but they have done nothing but sit idly by as the wealth of America has been siphoned offshore to the Cayman Islands.
The DTC took the position at first that Naked Shorting could never happen. Then they changed it to: 'it sometimes happens, but it's not a problem'. Recently it was changed to: Naked Shorting is a 'trading strategy'. That equates to: Robbing Banks is a 'Savings Strategy'.
As an example that makes what is occurring more clear, try substituting Real Estate in place of stock. In my example a person would buy a home. Pay their cash, move in to their house and live there a while. When they go to tap into the equity that is in their home, the bank informs them that their home has been sold to another party and they need to move out. At first the banks deny this could ever happen. Then they say, it happens sometimes but it's not a problem. Finally they say it's a 'Real Estate Strategy'. Congress and the Surreal Estate Exchange Commission (aka the SEC) finally decide that this practice might be harmful and pass a law they call the 'grandfather clause'. Effective January 1, 2005 No one can sell a home belonging to another party without their knowledge or permission. BUT all homes that were sold illegally before January 1, 2005 are 'grand fathered' and the seller's do not need to return the victim's home or money.
Effective January 1, 2005 If you sell a home belonging to another party without their knowledge or permission, we will fine you .1% of the sale price and tell you not to do it again. We will keep any money generated from fines so we can continue to adequately fund our 'oversight'.
If the example is Real Estate instead of stocks; it's abundantly clear that the victim's Constitutional Right to own property has been violated. To discuss whether or not thieves need to return or restore victim's property is ridiculous. To take YEARS to discuss doing the right thing is reprehensible. The SEC as a group has conspired with the wealthy elite to fleece the public. The evidence is damning and it has been seen and recognized by scores of investors worldwide.
I will be sending a copy of this to Congress. Congress is supposed to serve and protect the people who elected them, not perpetuate fraud against them. The SEC needs to go. The time to investigate this group has passed. I ask the Senate Banking Committee to tell the truth, that many in the investing public already know. Fraud is rampant within this institution and it needs to be dismantled.
May God Bless America, and protect her from enemies within and without.