Subject: File No. S7-19-07
From: Bob Smith

December 30, 2007

There is a crime that has been perpetrated on all US stockholders

This goes beyond NFI and OSTK- it goes to the heart of the US equity markets.

The DTCC seems to believe that when a shareholder buys a stock- it is equivalent to depositing cash into a bank account. read the dtcc response to the Washing Times editorial on phantom shares.

Here is the phantom shares editorial

here is the response DTCC issued.

and here is the response to the DTCC

Dear Mr. Goldstein:

I write in response to your November 29, 2007 letter to the editor of the Washington Times (copied below).

Contrary to your assertion, my commentary (also copied below) was not an "attack on our capital market system." Rather, it was proposal of workable solutions to solve the problem of companies chronically appearing on the Regulation SHO threshold list. The proposal was not "ill-conceived," but rather was one that has been put forth by the U.S. Chamber of Commerce, Members of Congress, state officials, academics, other public companies and even a former Chairman of the SEC.

As of today, Overstock has appeared on the Regulation SHO threshold list for 660 consecutive trading days. As you know (since it is the DTCC that compiles failure-to-deliver data), the number of failures-to-deliver during 2006 in Overstock stock peaked on March 20 at over 3.8m fails -- an extremely high number given the amount of Overstock shares issued and outstanding on that day, the amount of Overstock shares in the public float on that day, and the amount of Overstock shares deposited in the DTCC on that day. Note: Overstock has been unable to obtain failure-to-deliver data for any day in 2007. Please have the DTCC send me that data for 2007 (i.e., the aggregate amount of daily failures-to-deliver in Overstock stock for each day during 2007).

It cannot be that the failures-to-deliver that have kept Overstock on the Regulation SHO threshold list for such an extended period of time or that the large volume of failures-to-deliver in Overstock stock stock result from "administrative errors." Further, your comment that "in instances of long-standing failed trades, a broker dealer has the right to force a buy-in to complete the trade," is disingenuous because, as you well know, broker initiated buy-ins rarely occur.

If there is shame to be had, it belongs on a DTCC which chooses to attack (and lie about) a company that has been perennially on the Regulation SHO threshold list rather than participate in a finding a solution to the very real problem of chronic failures-to-deliver.


Jonathan Johnson


Now we all need to ask ourselves a few questions.
- when we buy a stock are we buying an asset?
- Is it ok for them to take our stock and loan it out?
- Is it ok for them to take our shares and loan them out without expressly notifying us?
- To add insult to injury- they are taking our shares in order to driver the shareprice into the ground.
- Then they dont even give us a cut of the borrow fee.
- Would you unknowingly let someone borrow your house- would you let them devalue and debase it- would you let them rent it out without your knowledge and with no form of compensation in return- even though the house is rented without our knowledge the brokers collect a borrow /rent fee on the loaning of our shares / house/ asset

The DTCC seems to believe that purchasing a stock is equivalent to depositing cash.
When I deposit cash I know full well that the cash is lent out to others- and that a higher rate of interest is being charged than the interest I receive.

But I was under the assumption that when I purchased a stock- I was buying a hard tangible asset.
When I purchase a stock- it should affect supply and demand- I should own something that is finite- and something that expressly belongs to me The DTCC- the steward of the US equity markets seems to believe otherwise

The US equity markets can be gamed through the stock borrow program and the multiple FTD exceptions that are happily granted to illegal short sellers.

I believe that the stock borrow program is broken beyond repair, and it is an atrocious flawed system with no checks and balances. The Stock Borrow rules that are in place favor illegal manipulative short sellers over retail shareholders. The DTCC has destroyed any semblance of fairness, and openness in the equity markets because of their ignorance and their refusal to change, or perhaps it is something more sinister

This is the reason THEY attack any that try to shed light on this disgusting debacle that is the US equity market, the way shares are confiscated quietly and manipulatively is inexcusable.

Patrick Byrnes one unforgivable offence is that he has begun to educate the masses to the (robbery) distortions and the deceits that the DTCC inflicts on an unsuspecting public each and every single day.