Subject: Short sales

July 16, 2008

Mr.Cox just said on CNBC that naked shorts are legal, I know what it means to borrow the stock to make a delivery what I don't understand is how does a naked short sale make delivery, that sounds like they are not making delivery and what does the SEC do to the clients that trade naked and don't make delivery. I just don't understand how we can have 2 different rules (1) borrow and make delivery (2) sell naked and don't make delivery, well one has to be against the rules. I would appreciate if someone can tell me the difference because it looks like in I am not getting something here.

Thank You
James W. Tamuccio SR