Subject: File No. S7-19-07
From: Richard B. Hepler

July 8, 2008

It is indicative of a broken system when the Commission continuously fails to enforce the existing regulations against NAKED SHORT SELLING, a practice harmful not only to individual investors, but also to the U.S. economy as well.

I support elimination of the Market Makers exemption.

I support amendment to rule 203(b)(3)(iii) of Regulation SHO - completely eliminating the close out exemption for option market makers as proposed (not alternative 1 or 2) .

I support amendment to rule 200(g)(1)which will require a "locate" on short sales securities and proper marking of sales as "long" or "short".

I also support amendment to rule 200(g)(1) proposed in the second round in release 34-56213 File No. S7-19-07 because equity investors are being harmed from mismarked sales as "long" when they are NAKED short which counterfeits shares--an illegal activity

In the event of failure to amend rule 200 (g) (1), please make and release a cost anaylsis incurred by equity investors.

The SEC must do a cost analysis incurred by equity securities investors if you do not eliminate the market maker exemption, as your new data clearly shows the fails are being produced by invoking that exemption which, in turn, harms equity investors.

I fail to see "why" the SEC--which espouses on its website that it's dedicated to protecting investors-- is not only reluctant but also remiss in its enforcement of those rules, regulations and laws CURRENTLY on the books.

The SEC stewardship is proving harmful to both small, private investors and the U.S. economy. Will the likely evolution be the FED's usurping present SEC enforcement functions?

A remedial focus on NAKED SHORT SELLING, with dispatch, should be the SEC's mandate to curtail the derivative theft from small investors.

Your consideration is appreciated.