Subject: Re : s7-24-08 --SEC's lack of transparency with regard to SPAC "units" and "long sales" of component common shares

September 30, 2008

I am a former analyst and investment banker and have been a full-time investor-trader for the past 12 years.I have never sold short illegally--never sold short at all,in fact--never even been on margin.In short(no pun intended),I am one of the "good guys". But what I also am is an expert in the area of SPACs (also known as "blank-check companies").I was on the board of one of the first SPACs created 12 years ago and have been widely quoted over the years by the press in articles involving this security class.These SPAC securities have represented 100% of my business activities over the past 3 years.Thanks to the rushed into action,poorly thought out,poorly worded, poorly implemented new short-sale restictions the SEC has imposed,you have cost me my living and you have done so via a flagrant disregard to situations like mine which have nothing whatsoever to do with short selling of ANY kind! Let me explain---As you may know,20% of all IPO dollars raised over the past two years have been via SPAC IPOs.So we are talking many billions of dollars of market cap in these things currently trading.SPAC "units" generally consist of one common share and one warrant,each of which trade PUBLICLY and FREELY as seperate securities of their own.When I purchase a unit in the open market,I am,at that moment in time(and based on the underlying "SEC approved" structure of that security)"long" one common share and one warrant.I have the right to hold onto to that unit as is,OR to sell either of those component securities in the open market.I have been doing this for years with no issues whatsoever UNTIL this amateurishly articulated short-sale restriction ruling.Now,all of a sudden,I am being informed by my brokerage firms' clearing agents that should I buy such units,I am no longer permitted to sell the component common shares or warrants until AFTER THE ACTUAL SECURITIES OF THESE COMPONENTS ARE PHYSICALLY IN THE ACCOUNT! Their reason? They are concerned that because of the extra day or two that it takes (beyond the normal 3-day settlement process) due to the need for the reorg department to "break up" these units,this may be considered a violation of the new short-sale rules since the actual shares will not be in the account within 3 days from the trade date.Well,in Reg SHO,which the SEC itself created,the commission discusses just such a scenario and clearly recognizes that there do indeed exist owned securities like these units whose very structure not only implies, but GUARANTEES "net long ownership" of the underlying common shares.In such cases where "short-exempt" status can be be reasonably defended ,the "component" common shares,if sold,would then be subject to a more reasonable "trade date + 6 day" timetable for physical delivery. That is all I am requesting from the SEC---MAKE CLEAR IN YOUR NEXT MISSIVE THAT IN CASES LIKE THESE SPAC "UNITS",WHERE THE UNDERLYING COMPONENT SECURITIES ARE NOT "RESTRICTED",BUT ARE INDEED FREELY TRADEABLE,THAT THE SEC WILL GRANT A "SHORT-EXEMPT" STATUS ON ANY "LONG SALES"(and they ARE long sales!) OF THESE UNDERLYING COMPONENTS --which,at least,will permit a "trade date plus 6" timetable for delivery!!!! If there is no clarification forthcoming on this issue by the SEC, and I continue to be told that,upon purchase of these units, I am unable to take advantage of my clear-cut right to sell the component shares, I will have no choice but to pursue legal action on this matter. Please do not hesitate to contact me should you have any questions on what I've described here.And,if you feel the need to further clarify,I would be happy to refer you to attorney David Miller of Graubard Miller who is universally credited with creating the legal structure of these SPAC securities in the 1990s. Thank you, Gary Stein