August 8, 2006
The presence of many companies on the SHO list for extended periods of time demonstrate the ineffectiveness of the existing regulations. Fails to deliver were illegal before Reg SHO was enacted and in grandfathering them, the SEC has assumed authority it does not legally possess. No fails should be grandfathered, period. Short sales must only be allowed with prior location of shares without exception.
Sales without delivery is fraud, plain and simple. It's illegal and wrong. All exemptions to location of shares must be eliminated, including those for options market makers. I look forward to legislation that eliminates illegal short selling entirely.
Thank you.