Subject: File No. S7-19-07
From: John M Leyes, Ph.D.
Affiliation: retired

July 22, 2008

July 22, 2008

Dear Sirs/Madams:

Naked short selling has troubled me for a number of years.

First, under SEC rules, it is illegal, and the current regulations on naked short selling are being selectively enforced. (That is, only small investors must borrow shares to sell short.)

Second, the amount of naked short selling has worsened in the last few years.

Third, the SEC, about ten days ago, indicated that naked short selling will be enforced for 17 companies plus Fannie Mae and Freddie Mac, and for 28 days.

Four, by logical deduction,, the SEC is telling us that the rules on naked short selling will continue to be enforced selectively once the 28 days have passed. Again, only the small investors will be subject to the SEC rules on short selling.

Five, it appears, therefore, that, hedge funds for example, hedge funds will be able to engage in naked short selling without having borrowed shares. This is highly discriminatory, wouldn't you think?

Six, the evolving SEC treatment of short sellers reminds me of George Orwell's Animal Farm, in which the pigs maintained that "ALL ANIMALS ARE EQUAL, BUT SOME ANIMALS ARE MORE EQUAL THAN OTHERS. Perhaps the SEC should change its name to Animal Farm and begin hiring only pigs.
Seven, I look forward to learning that naked short selling will become as odious as robbery and that the SEC will begin enforcing regulations that prohibit naked short selling by everyone, including the pigs.

May fairness and honesty prevail in our stock markets.

John M. Leyes. Ph.D
Lawrenceville, GA