Subject: File No. S7-19-07
From: Evaan L Portillo

July 28, 2008

Re: File No. S7-19-07, Amendment to Reg. SHO Addendum to Comments Previously Submitted on 7-16-08

I am an individual investor who is very concerned with the negative influence that naked short sellers are having on markets and on my investments. I have read on (Jim Sinclair, 7-17-08, and Monte Guild, 7-15-08, two men with many years of experience in the financial world) that even though laws are already on the books which make naked short selling illegal, the laws are ineffective and some changes are required. According to Jim Sinclair, "Reg. SHO as written is ineffectual for the following reasons:

1. It fails to place the onus on the broker dealer to assure delivery by borrowing the shorted shares. Simply accepting the assurance of the hedge fund and dropping the matter entirely at that point is useless in preventing naked short selling.
2. SHO must require fails to deliver to be bought in on the fail date plus one day.
3. Using foreign exchanges to gain advantage in violation of the Reg. SHO, especially German and Canadian exchanges, must be stopped or Reg. SHO is rendered totally ineffective.
4. Exempting primary dealers results in a giant loophole in any regulation honestly desirous of enforcing the already in place regulations. A primary dealer is by definition a trader who makes both bids and offers on a continuous basis. Because of this a primary dealer will be short but not for investment. The short in the primary dealers position will rotate between short and even, possibly short on balance. A primary dealer will then be able to make delivery on the short without borrowing because when bids are hit (and they will be) he moves either to flat (even) or turns the short by purchasing voluntarily or involuntary. If this entity does not maintain a constant two way bid and ask then this entity is NOT a primary dealer. Giving the primary dealer 21 days to deliver before buy in is reasonable but any longer and you are supporting a camouflaged naked short.
5. Naked short selling is a long time violation of present regulations prior to Reg. SHO. A recent attempt to ban Naked Short selling by using an emergency declaration on selected financial entities shows the ineffectual nature of Reg. SHO. It is highly prejudicial and has the apparent effect of blessing naked short selling against all other investment sectors.

Selective application of law is a total violation of the need of all forms of jurisprudence to deal equally with all it regulates."

Please do what you can to go after the naked/non-borrowed shorts in all areas, not just in the financials.

Evaan Portillo