July 9, 2008
Firt of all I appreciate the opportunity to post my comment on the Commissions proposed amendments to Regulation SHO here however, I do not understand why we need to ask you to do the right thing. I am a shareholder of a company that has appeared on the Regulation SHO threshold list continually.
I support the Commissions proposed elimination of Regulation SHOs options market maker exception and encourage the Commission to complete the administrative steps to accomplish this change as quickly as possible (e.g., by years end). The options market maker exception has been a well known tool of manipulation and must be eliminated immediately to clean up the markets for public companies and shareholders. It is only right that these companies are allowed to float at their own level.
As we all know Naked Short Selling has been an issue for a very long time especially for targeted companies who are literally murdered as was our oompany which was unmercifully driven into the dirt as have countless others.
I commend the Commissions recent action to strengthen Regulation SHO through the elimination of Regulation SHOs grandfather provision. I am also pleased that over the past several months that Chairman Cox has personally spoken about the abuses of naked short selling and the need to end this manipulative practice. However, I remain concerned that, despite the Commissions recent efforts and Chairman Coxs public comments, these abuses continue.
While the elimination of the options market maker exception and the grandfather provision will significantly strengthen Regulation SHO, these changes alone will not adequately solve the problem that results in continued naked short selling and failures-to-deliver. I request that the Commission (1) impose in Regulation SHO a requirement of a firm location of shares to be borrowed before a short sale can be executed, and (2) enable transparency by requiring timely disclosure of the volume of failures-to-deliver shares of companies on the Regulation SHO threshold list. The Commission should issue and complete promptly a notice of proposed rulemaking to implement these two critical components of effective Regulation SHO reform.
Please do the right thing for America.