October 7, 2005

Subject: for File # 265-23

To SEC file # 265-23

Small companies, from pink sheeters to otc's and even NYSE listeds, are being pillaged, and their shareholders harmed and even disenfranchised by naked shorting/fail to delivers. Reg SHO, by grandfathering the past and condoning the status quo since there are no penalties and no enforcement, has merely exacerbated FTD's/naked shorting as a manipulative trading tool.

The status quo under Reg SHO is a license to counterfeit shares among a hegemony of hedge funds and their broker-bankers, exchange specialists and market makers, and the DTCC and all its subsidiaries in the shell game attempt at burying responsibility for the fails.

While the industry profits from the inflated volume and trading of the excess/non-existent, shorted, counterfeit shares, the companies' capital opportunities are limited. They and their shareholders are illegally diluted and suffer reduced share prices as the excess-shorted-FTD-unborrowed shares tip the natural balance of supply-demand, bid-ask and thus lower market prices.

Shareholders who unknowingly buy the FTD'd, short-sold shares are further denied their right to have their share votes count. They can "vote," but their vote may not be fully counted when the votes would exceed the number of legitimate shares outstanding.

While Reg SHO-enabled counterfeit shares float and trade unbridled, both naked and legitimate short sellers of shares actually borrowed are also playing with unjustified advantages. NYSE Market On Close orders are regularly used by shorters to lower the would-be closing price of an issue upon the mere cooperation of the NYSE specialist AFTER the closing bell. Short sales are indistinguishable to the retail investor. They should be earmarked for all to see, trade by trade, and reported daily. The current monthly short reporting requirement is grossly insufficient and easily "painted" by covering for a day to present a less representative picture. Market Makers regularly misuse their naked shorting exemption to influence closing prices at Options Expiration as it suits their position.

"Main Street," where small companies work and retaiI investors live, is now coming to see the sausage being made in our/your markets. It is past time for the SEC to assert some control of the sausage factory from the "SRO's," the clearing system and manipulative short-selling FTD counterfeiters -- before Main Street is pushed away from the dirty table and turns toward the court house.

Jay Bee
Columbus, Ohio