Subject: File No. S7-19-07
From: Jim Carnes

July 11, 2008

These comments are intended to strongly convey my support for:
1. The amendment to Rule 203(b)(3)(iii) by totally eliminating the close out exemption for Option Market Makers, but not alternative 1 or 2. Anything less than total elimination of this exemption merely helps to perpetuate the fraudulent practice of "naked short selling" and harms the investor.
2. For the proposed amendment to Rule 200(g)(1) requiring broker-dealers to document the location of a security related to a sale marked long and in so doing determine if the customer is deemed to own the security within the meaning of Rule 200(g)(1). If the broker-dealer is unable to document the location of a security related to an order marked long, the broker-dealer would be required to mark the sale short. The amendment of Rule 200(g)(1) was proposed in the second round in Release 34-56213, File No. S7-19-07. This amendment should also be adopted because equity securities investors are being harmed by mis-marking of short sales as long sales, thus circumventing the short sale rules. This also perpetuates the fraudulent practice of "naked short selling".
3. Further, the Commission should reinstate the "Uptick Rule" promptly. This was a very poorly studied and an ill conceived decision to eliminate it on the part of the SEC. This rule was adopted and in effect for decades for very good reason. There is absolutely no benefit to those investors to which the Commission constantly refers as their primary concern and duty to protect. It merely facilitates the opportunity for those who wish, to conduct "bear raids", much to the detriment of the market in general and the average investor in particular. This is very harmful to the investor.