August 17, 2007


It is with great appreciation that I welcome reform to the present laws which allow Market Makers to freely sell shares which do not exist.

The practice of NSS (naked short shares/selling) should NOT be tolerated, any more than the FBI tolerates counterfeiting of U.S. currency.

The effect that NSS has on the investing commuting is equally as damaging to publicly traded companies, as the effect of counterfeiting U.S. currency has on our economy.

It is my opinion that the companies that practice this form of counterfeiting should have all licenses and rights immediately removed, with severe penalties, as well. Penalties and/or fines alone are simply not enough, as history shows these companies continue to practice these activities, regardless. These companies should no longer be allowed to 'make markets' any sooner than a Felon is allowed to work in bank.

One particular company that flagrantly practices NSS is Knight Securities, and should be immediately investigated for such activities. Though I am sure several other Market Makers engage in NSS, none more than Knight Securities are more damaging to the investing community. Knight Securities should come as no surprise if investigations simply look at how fast the company has grown in the last 5 years....growth fostered from the wholesale of shares that never existed prior to NITE 'filling the order', but not delivering the shares.

Also, it would do well to consider eliminating ALL shorting practices in ALL exchanges, since the entire basis of shorting is unjustified. It is plainly obvious that the 'market' is perfectly capable of 'correcting' itself, by simple supply and demand, that the practice of shorting (even if done legally) is not needed. The practice of shorting initself, opens 'doors' to criminal trading activity (stock manipulation, for one), that the market in general, does not need, and can function quite sufficiently, without.

Since the transfer of company shares (certificates), which bears proof of purchase, no longer exists in the electronic trading world, until the Market Maker has been fully removed from the transfer of shares, it is many people's opinion (not just mine) that greater accountability NEEDS to be maintained.

I STRONGLY support any actions taken to accomplish this accountability.

David shutvet