Subject: File No. S7-19-07
From: Rick Schmidt

July 16, 2008

Short selling rules should be applied equally across the board, there should be no entities such as market makers treated special. Every effort should be made to restore confidence to the market place by eliminating the possibilities for naked shorts and by prosecuting those who knowingly and willfully conduct such acts. No particular market should be treated special for this rule, it should be applied to all markets.

Investors (the innocent) utilizing brokerage houses that engage in supporting such acts as naked shorting should be protected from damages arising as a result of the brokerage houses rules violations. These investors should be given notice and opportunity to close out their accounts with offending brokers without any penalty within a reasonable period of time such as 90 days. All brokerage houses should be required to contribute unlimited funding as a part of the cost of doing business to a special fund set aside to protect offended investors once the offended brokerage house has bankrupt so as to encourage honesty among all. Open books for all with no anonymous reporting should be required to help all brokerage houses in monitoring each other for honesty and to demonstrate continuing integrity. If dishonesty is allowed there is no level playing field for any investor and I for one don't want to invest so long as the deck is stacked the way it presently, obviously, is.

Along these same lines, it should be required that stockholders be allowed much easier access to actual stock certificates when they desire that there shares be in cash, and therefore unavailable to be borrowed. This needs to be made automatic for retirement accounts (IRA, 401K, etc.). Shares should be automatically accounted to the account holder rather than held in street name as a matter of regulatory rules and legal statutes to protect these retirement accounts should brokerage houses fail to remain solvent.