From: Federico Lorcaz [senor_zapata2003@yahoo.com]
Sent: Sunday, November 30, 2003 12:15 PM
To: rule-comments@sec.gov
Subject: S7-23-03:

Sirs,
       The proposed amendments to Rule 105 of Regulation M would require short 
sellers in all equity securities to locate securities to borrow before selling, 
and impose strict delivery requirements on these securities. Supposedly, the 
proposed admendments are being considered to deter naked shorting.

      Since the ventures targeted by abusive naked shorting are typically thinly 
traded and tightly held markets, the SEC might want to consider that naked 
shorting is a mechanism used by money launderers, posing as "venture capitalists", 
to deflate share-price in rigged markets. One sees these "financiers" exhanging 
their dirty money for millions of shares of prefered convertible stock. Their 
assigned agents use internet message boards to artifically inflate and deflate 
their toxic markets in combination with naked and offshore shorting assaults 
on the company they've financed. 

     These markets are moved in a pattern that repeats itself over and over again. 
Financial message boards serve as virtual boiler-rooms. Self-appointed cyber-police 
posing as "scambusters" and "truthseekers" target the toxic-financed ventures 
(usually off-the-shelf, blank-check or reverse merger companies)  AFTER the
prefered shares have made the conversion to common and the naked shorting campaign 
is in full swing. Nobody cares where the "venture capitalists" got their money to 
begin with. Certainly no one cares where it goes after it's been exchanged for 
shares in the rigged market and washed clean. Without naked shorting, money 
launderers might opt for other ways to launder their dirty money besides death 
spiral financing scams that hurt mainly gulible investors. The SEC owes it to 
the investors they protect to rid these markets, particularly the unregulated 
markets, of any criminal element in them. That includes allowing money launderers 
to use naked shorting to accelerate deflating share-price in rigged markets.

S. Zapata
Investor


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