July 18, 2008
By way of qualifications, I am a US Citizen, an investor for 50 plus years, a former small business owner and manager and currently observe the equities market and manage my own assets.
I am deeply dissapointed in your lack of effective enforcement of rule SHO prohibiting "naked shorting" of equities and commodities.
I am also deeply dissapointed that Rule SHO has so many exceptions allowing large financial entities to "naked short" with virtual impunity.
I request the following action.
1. Immediate enforcement of the current rules against "naked shorting" by requiring all sold securities be delivered on the normal settlement date without exception and that the currently established penalties be enforced against both the broker and the seller in the event of failure to deliver.
2. Elimination of the special rules allowing a longer delivery period for market makers and other large financial organizations, including the Federal Reserve Banks and their agents and the United States Government, its branches and agents.
3. Define selling a security with the intent not to deliver as fraud and prosecute as such.
4. The penalties for failure to deliver a security that has been sold should include:
a. Requiring the seller to immediately "purchase and deliver" the security involved.
b. Loss of trading privilages for a repeat offender, broker/representative, brokerage firm and actual seller. This includes officers and employees of the Federal Reserve Banks and the US Government.
c. Severe fines and incarceration of those individuals who continue to fail to deliver sold securities after their tranding privileges have been revolked.
Glydewell B. Burdick Jr.