Subject: File No. S7-19-07
From: ines shareholder

July 9, 2008

Is it possible that after all these years, and having comments page over and over again.. you need more comments from the public to act on this?

Is there any doubt after all these years, that naked shorting is destroying our markets, companies, and investors confidence and robbing the investors.

Grandfather clause should never ever been implemented at all in the first place, forgiving the issuance of non existing shares and non settlement in equities by market participants for years.

But after it was done and proven a very bad choice as it only kept the doors open for more failed to deliver, more unsettled trades to go on, more sales of illegal and manipulative out of thin air nonexistent, never issued by the company phantom naked shorted shares to be sold into the market, money taken from investors for something that really does not exists on behalf of market participants.

I must say, that I used to follow with great enthusiasm and great expectations and faith into SEC cleaning up this mess, and taking out the naked shorting and other illegalities in the markets.

Then i have spent years following the issues with very little or none actual enforcement or progress. I remember when Nazareth that worked for SEC diminished the sincerity and accuracy of those companies that complained to SEC on account of naked shorting market abuses, by saying its only an excuse for companies that dont have good business, implying that naked shorting is not the problem or even doubting its existence.

If we can say we have gone a long way since then its only in regards to SEC even recognizing publicly that naked shorting exists and its very damaging. However, the job on extracting it and closing the loopholes or enforcing cover of unsettled trades has not happened yet.

Grandfather clause, get rid of it

Uptick rule , bring it back, taking away uptick rule while not fixing the loopholes on naked shorting only helps those market participants brokerages etc.. that are already using naked shorting and have failed to deliver in the past continuously.

Market makers exemption on options, get rid of it, take it away, its connected to the same problem.

Talking about it year after year and not doing anything about it and not enforcing the changes, not enforcing the settlements, not closing the loopholes.. only extends for the same failures to grow.

We have talked about it last year.. when we had comments page from august to end of November on sec site. We have talked about it for years now. And still there is no real action and enforcement shown from SEC side that would stand for protecting the investors in this market.

Its a crying shame what has been allowed to go on for years. And still is.

This issue of naked shorting has been going on for years.
I have no doubt that SEC has now and had enough data in the past and knowledge how rampant this is and how wrong it is. After all it is your job to be market regulators.

I would imagine that market regulators job should be keeping it fair for all. Not just good for brokerage houses, and big investment banks and clearing houses but also for people, individual investors that invest in these markets and also for the companies that go public in these markets.

But if brokerage houses can sell something that does not exists, like naked shorted shares, and take good real money for something that does not exist its not fair.

And when those naked shorted shares are sold, and no delivery is enforced and failed to deliver positions go on and on like for the companies on your sho list.. some for years.. and those companies are diluted and value destroyed its not fair to those companies either. They are simply robbed of their value.

How can American spirit of entrepreneurship go on with existence of this? How can individual investors have any faith in the markets? When will the confidence in regulatory system be regained if there is no regulating and enforcing of the said regulations?

Talking about this after this long time seems only as an escape clause and tactic of delay from really enforcing the cover of failed to deliver positions and correction of other related and connected issues.

Talking about this after this long time only gives more time to those that have already violated the system with its loopholes to damage more companies and shareholders for their own profit and or delay the corrections.

Billions of dollars.. have been made and taken by issuing non existent, phantom naked shorted shares. Billions of dollars in real money from shareholders that invest in this market.

Billions of dollars collectively went from investors in this market to Brokerage houses.
For those billions of dollars investors did not get real shares. They were sold something that does not exist.

On the ruin and back of those individual investors and companies they invested in but were diluted ( or totaly killed ) by issuance of illegal naked shorted shares, market participants made money. Great profits and bonuses were made by market participants on the ruin of others.

Who will repay those shareholders?
Who will repay the companies that were victims of this?

Is the SEC working on these issues to repay the damages plus interest on it for all the damaged shareholders and companies? I hope they are because shareholders are watching and waiting on it.

That is alot of shareholders and alot of companies, but when market participants took their money in exchange for naked shorted shares they did not complain.

Reg sho allowed forgiveness for these happening, market makers exemption helps this continue, taking the up tick rule out while this exists only expedites more of the same to continue at faster fashion.

There is no confidence in the markets or its fairness while this continues. And damages for all that has happened to shareholders and companies has to be paid as well.

SEC took time last year to have comment pages on reg sho and on market makers exemption.
Reg sho comments were done with in December 2007.
It is to my great disappointment and really disbelief that you have not acted on it at that time, but instead you waited another 6 months, to only reopen the comments page again and bring it to ground zero again.

However, the up tick rule when you took it away did not take that long. It did not go over and over again. on comments page. That was dealt with quickly. And unfortunately it was one thing that did not help the shareholders or companies they invest in but the market participants that now dont even have to wait for an uptick to short the company, and with naked shorting rampant and still allowed in our markets it obviously helps exactly the same people to easier continue what they have been all along Naked short some more with less difficulty, fail to deliver again at faster speed.

I think there is plenty of data in all aspects on the issue of naked shorting and sec has it now and had plenty in the past.

The public has been crying about it for years now.

Is it really necessary that every citizen of this country, a fireman, a cook, a waitress, a clerk, a white collar worker and blue collar worker, homemakers and grandparents, senators, doctors, truck drivers... become equally knowledgeable and expert on the issue of naked shorting and all its related illegalities so they can make a comment on sec page before sec will act on this?

Is it not regulators job to act on their behalf and for their protection.

Is it not embarrassing and sad to hear people comments that our markets are rigged? That they have no confidence in fairness in the markets? That cards are stacked against the individual investors and companies specially those targeted by naked shorting. That sec actions or inactions protect more interests of market participants, then the interest of individual investors and companies and fairness to all.

I think it is sad to hear all this.
Because there are good people working working in our markets and our brokerage houses that would not stand for these illegal activities, but they feel powerless to change it themselves. They are not the ones in charge.

But as long as loopholes allow it and there is no enforcement of any laws brought forth, it will continue.
Billions and trillions have been made with naked shorting and that is billions and trillions of dollars in damages.

It is not a question what needs to be done or if it needs to be done and changed.
It is the question if those in charge will actually do it and when.