Subject: File No. S7-19-07
From: Paul Floto
Affiliation: Patriot

August 11, 2007

To the Department of Homeland Security:

I am sure you are aware of rumors that terrorists shorted hotel, airline, and other stocks, as well as buying large numbers of puts immediately prior to 9/11, so that they possibly received huge profits from their attacks.

You should also be aware of the fact that financial terrorists are still permitted to attack the US economy by shorting stocks, and then naked shorting unlimited additional shares of companies through the market-maker exemption to Reg.SHO. Using these methods, severe damage has already been done to the US economy.

Through creation of the ABX indexes, and then through unlimited shorting of that index, the entire US mortgage industry has been thrown into chaos. Many mortgage originators have been forced into bankruptcy, and other originators have been forced to curtail lending, since they have been denied access to capital markets by bear raids on their stock price.

The SEC, by not yet eliminating the market maker exemption to Reg. SHO, and allowing unlimited counterfeiting and dumping of shares by the options market makers has facilitated the destruction of our economy by financial terrorists.

Unlimited short selling, and unlimited creation of puts, provides nothing but financial incentives to further attacks, both physical and financial, on the United States.