Subject: File No. S7-36-11
From: Roger A Froehlich

September 19, 2011

The SEC should be charged with protecting the public interest and integrity of the markets. Current Rules/Regulations and practices do not accomplish this objective. There is too much manipulation and abusive trading evident in the equity markets today, and the Rules/Regulations by which the SEC oversees these markets are deficient and need to be upgraded. There are several Rules/Regulations/Practices which combine as tools for manipulation - enabling the "gaming" of the markets in a manner similar to "Three Card Monte".

Specifically - 1. Allowing "pre-arranged" trading in micro fractions of one cent increments enables a manipulator to endlessly "cross" phony volume "in house - one desk to another within the same entity, or among a group of conspirators - for the sole reason of "painting the tape". This activity destroys price discovery which can only be accomplished by legitimate transactions between "arms length" buyers and sellers within a well regulated marketplace.
2. The removal of the "Uptick Rule" gave a "green light" to abusers of the marketplace to run substantial phony volume through on the downside, by employing the tactics noted in 1. above.
3. The use of "Dark Pools" and "off regulated exchanges" to similarly "cross" phony volume at prices that do not reflect true supply and demand does great damage to price discovery and the integrity of the markets, by creating false impressions of actual values.
4. Likewise - Permitting exchanges to pay "rebates" for volume - distorts true trading values and reasons for "arm's length" buyers and sellers to come together through legitimate transactions and unbiased market making activity on properly regulated exchanges. These rebates - coupled with High Frequency Trading in increments of 1/100th of 1 cent - relegate trading to a truly "phony realm" where volume and price establishment is purely created for the purposes of gaining rebates - with no other legitimate reason or value.
5. All of the above has served to diminish the public's trust in the integrity of the markets, and created a climate of suspicion that the markets are "not a level playing field' - and have become solely a rigged casino favoring those who are capable of employing the abusive and manipulative tactics noted in these comments.

To restore public confidence in our markets, the SEC should immediately prohibit "pre-arranged trading" of the sort noted above - and the practices that permit this manipulation. Unbridled short selling would be seriously contained if the Uptick Rule were reinstated Prohibit exhanges from paying rebates for volume: Prohibit the use of "Dark Pools" for the crossing of phony trades at prices
away from those determined by buyers and sellers coming together on regulated exchanges in "arms length fashion".

High Frequency Trading should continue to be permitted - as long as these other tools for abuse and manipulation are prohibited. HFT - in and of itself - is not the problem - as long as this is used to enact transactions among arms length buyers and sellers. However - those employing High Frequency Trading - should not be permitted to see orders in any way before bids and offers are sent into the marketplace. Front Running - even when done in a thousandth of one second - is still Front Running - a practice that has been outlawed for many years.

Thank you for your consideration of all the above. It is to be hoped that the SEC will regain control of these markets - to restore integrity and prevent a future occurence of the Flash Crash of last year - or any other form of cyberwarfare that might impact our markets through the use of these abusive and manipulative tactics.