July 15, 2008
Dear SEC Commissioners, Sirs, and Madames,
Thank you for this continued opportunity to comment on this Reg SHO Amendment.
It is imperative that the SEC enforce all trade settlement laws.
All FTD's at T+3 must be met with immediate broker buy-in.
That is the solution allowed for by the SEA 1934.
It breaks the US securities laws regarding prompt and accurate trade settlement within T+3 when the SEC allows UCC state securities entitlements to take the place of actual securities settlement as defined in federal law.
Furthermore, the law of the SEA 1934 section 17A requiring prompt and accurate trade settlement is broken when the national clearing agency NSCC automatically clears unmatched trades, which DTCC CEO JIll Considine acknowledged to be automatic practice in her June 2004 comment letter to Comm. Katz.
Recently, Chairman Cox stated that he would try to protect Fannie Mae and Freddie Mac from naked shorting. This begs the question, why hasn't the same concerted effort been exercised regarding naked shorting for every stock?
It is obvious that the SEC realizes the problem for illegal fails to locate and deliver for bank stocks and is ready to take action to protect these securities. That need is identical for every US stock that deserves the same protection from illegal fails to locate and deliver practices.
Leslie Boni's SEC study concluded that the securities industry contains pervasive strategic use of FTD's.
I remind you, Sirs, of your duty to pursue and maintain perfect mechanism, and to enforce full industry compliance with existing laws mandating prompt and accurate trade settlement. To know that a law is being broken, and to not take appropriate action within your scope of duty, is complicit activity and may be worthy of charges of aiding and abetting in criminal behavior.
My suggestions to you are as follows,
1) reinstate the uptick rule
2) cancel the reg SHO grandfather clause
3) cancel the market maker exemption
4) enforce that 100% of trades be matched and settle within T+3, or else enforce immediate broker buy-in at T+4.
5) acknowledge that UCC defined securities entitlements do not meet federal law standards, nor substitute, for any US equity securities.
6)March down to the closest FBI or DOJ office and turn yourselves in and explain for what reason you decided to not uphold your duty to enforce existing settlement laws in hopes that some leniency may be granted to you in your knowledgeable abetting of these crimes against American investors and our great American Economic and National Security.
US Citizen and Investor