Subject: File No. S7-12-06
From: Joseph Schulte

March 27, 2007

In reference to the illegal and unethical "grandfather" clause, regarding the failures to deliver backlog, that was unconstitutionally piggy-backed to regulation SHO. When I first read of this clause my first impression was disappointment and betrayal in our government regulatory and enforcement agencies to allow the average investor to feel so insignificant and neglected. I have firmly believed after watching this unfold for the last 2 1/2 years, that SHO was never meant to correct any illegal settlement activity and that the "grandfather" clause just assisted in giving more time for a loophole to be found and manipulated in favor of the guilty non-delivering parties.
The "grandfather" clause is illegal and is only protecting those who did not adhere to market rules and regulations. Therefore, the SEC has seriously casted the shadow of implication on themselves by not doing their job and "enforcing" the regulations they were suppose to in the first place.
I was under the impression the SEC was to protect us, the investor It's perpetually to apparent that the fox (SEC) is still guarding the hen house within the markets.

Disappointedly,
Joseph P Schulte

ELIMINATE THE GRANDFATHER CLAUSE NOW