Subject: Naked short selling and Reg SHO

July 19, 2008

Subject: SEC Release No. 34-58107 S7-19-07

July 19, 2008

Dear Sir/Madam,

Concerning Reg. SHO, naked short selling.

I am not an experienced trader, nor do I have great wealth. I am, however, planning for my future. My strategy is to invest in stocks, holding them for their long term value. I have seen a significant decline in value over the past 2 years while investing in precious metals and their related stocks due to tremendous downward selling pressure when the volume is low and/or during the fading seconds of the trading day.

Companies with solid management, positive cash flow, and a bright future seem to be singled out by these underhanded naked short sellers. Their value moving forward is hammered lower to the point that they may find it difficult to gain further financing to expand their operations. Growth suffers. This seems to happen all too often when good news is released during reporting periods. Normally good news translates to higher numbers as reported on CNBC and other newsworthy organizations when related to the broader stock market. But good news, many times in the case of precious metals, does not translate to greater value and increased positive interest in this industry. This does not seem ordinary, reasonable, prudent, and, especially, legal.

Reg. SHO is not currently effective because it does not hold the broker dealer responsible for his actions. Accepting hedge fund’s word of their expectation that they will receive the borrowed shares does not assure that those shares exist – thus borrowing non-existent shares can reveal more shares traded than exist in the open market. Is that possible? How can we, as investors, try to save for our future when thieves take advantage of the law as written? Can the law be enforced across the board concerning all naked short selling and not just individually chosen financial entities? Broker dealers must be held accountable. Broker dealers should be required to show proof that they can assure delivery by actually borrowing the shorted shares.

Actually borrowing a stock with the expectation that it’s price will decline so you can buy it at a lower price, and then returning it to keep the difference is totally different than naked short selling. Naked short selling is underhanded and is illegal.

As a friend of mine states, “selective application of law is a total violation of the need of all forms of jurisprudence to deal equally with all it regulates.” I am not telling you something you don't already know. I am asking that you please accept my recommendation and consider enforcing the law fairly, equally, and completely to all broker dealers and please stop the illegal naked short selling activity.

Thank you for your time,

Gary Carnes