Subject: File No. S7-12-06
From: U. S. Citizen

March 28, 2007

The following is in my opinion,

1) Persistent FTD's, where the security is readily available in the market, equate to committing "market fraud" as the seller continually refuses to buy in on a readily available security, breaching the good faith contract made with the buyer to purchase and deliver that security within T+3. Those FTD's do not just constitute a fraud at the time of sale, but they remain an ongoing fraudulent act committed with the ill effects of illegal market dilution being continually perpetuated against all shareholders.

2) THe SEC's Reg. SHO Grandfather Clause( GFC) gives harbor to those fraudulent trades by rendering them unaccountable by Reg Sho and ineligible for the Threshold list. The SEC's GFC effectively promotes the continuation of market fraud, and shields the fraudulent participants from mandatory settlement as the law requires. Again,... all shareholders remain being actively harmed as this market dilution is perpetuated.

3)According to the SEC there are enough FTD's protected by the GFC to warrant significant market volatility concerns.
Who does the GFC primarily protect from the costs of such buy-in market volatility but the fraudulent sellers? The SEC appears to be protecting participants significant levels of fraudulent activity from the clear law of the Exchange Act.

4)The following definition is from Please ask yourselves why this shouldn't apply to the significant level of commited fraud perpetuated within the markets by the SEC's GFC.


A criminal charge of aiding and abetting or accessory can usually be brought against anyone who helps in the commission of a crime, though legal distinctions vary by state. A person charged with aiding and abetting or accessory is usually not present when the crime itself is committed, but he or she has knowledge of the crime before or after the fact, and may assist in its commission through advice, actions, or financial support. Depending on the degree of involvement, the offender's participation in the crime may rise to the level of conspiracy.

Thank you,
U.S. Citizen