Subject: File No. S7-19-07
From: Thyra Mangan

August 20, 2007

To whom it may concern:

You have requested comments with reference to eliminating the exception for options market makers. Let's compare that to the law.

The options market makers chose to misunderstand your Regulation SHO rule. Have you misunderstood the Securities Act of 1933 Securities Act? On your website you have the following, and I would like to ask you why you set "truth in securities" in quotes, as though this doesn't really mean truth in securities.

Do you think that truth in securities means whatever you choose to make it mean? It does not.

(Quote) Securities Act of 1933

Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:

--require that investors receive financial and other significant information concerning securities being offered for public sale and
--prohibit deceit, misrepresentations, and other fraud in the sale of securities. (End quote)

Read the second objective. Clearly you have failed to prohibit deceit, misrepresentations, and other fraud in the sale of securities. In doing so, shares have been counterfeited.

Under your watch, you have allowed failed to deliver shares to exist. Under your watch, you have failed to support investigation of those who would freely manipulate securities. Under your watch, you have provided rules allowing misunderstandings giving options market makers a free hand to manipulate the market. Under your watch, you chose to side with the options market maker and failed to advise the public of significant information concerning securities being manipulated.

Now, let's take a look at the Securities Act of 1934

(quote) Securities Exchange Act of 1934

With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs). The various stock exchanges, such as the New York Stock Exchange, and American Stock Exchange are SROs. The National Association of Securities Dealers, which operates the NASDAQ system, is also an SRO.
The Act also identifies and prohibits certain types of conduct in the markets and provides the Commission with disciplinary powers over regulated entities and persons associated with them.

The Act also empowers the SEC to require periodic reporting of information by companies with publicly traded securities. (End quote)

I have been reading through this information, to see where it is your responsibility to provide a venue for the options market maker to operate his business. Nowhere did I see that it should be convenient for the options market maker to buy and sell at will without paying, without delivering, failing to mark securities and locate.

Apparently, you and the options market maker defined cash equals air. How does that work?

It is time to enforce the securities law, and penalize those that choose to make up their own definition for truth in securities.

It is time to level the playing field. My shares settle in three days. I pay with cash on the day I buy securities. I get paid three days after I sell securities. I can live with that. Three days, US currency, is the level playing field for everyone dealing with public securities.

If the options market makers want something else, let them deal in private securities.

Thyra Mangan