April 27, 2007
Dear SEC,
In order to substantiate my claim in prior comment letters that the SEC is playing a game of outright evasion and distortion (smoke and mirrors)regarding the aggregate monetary (dollar) value of fails I submit the following:
The proposed rule makes it's only reference to the monetary value of fails in footnote #3 (Note that it is attributed to the NSCC not the SEC)- "According to the NSCC, on an average day, approximately 1% (by dollar value) of all trades, including equity, debt, and municipal securities fail to settle. In other words 99% (by dollar value) of all trades settle."
Now, I have read final rule - short sale (Regulation SHO) numerous times and I can not find a single reference to DEBT and MUNICIPAL SECURITIES. Can the SEC please explain to the American people why they insist on playing games with the data? Final Rule - Short Sale (Regulation SHO) has absolutely nothing to do with DEBT and MUNICIPAL SECURITIES and as such any inclusion of debt or municipal securities in the data is intentionally designed to distort the true picture of this mess.
Why is the the SEC incapable of providing and analyzing clean data regarding EQUITIES (Regulation SHO's focus)? Why is the SEC placing these intentional distortions (smoke and mirrors) from the NSCC into the record to deceive the American people?
I don't know the answer to those questions but one can only assume the true, unadulterated EQUITY data is so damaging to the Industry and the SEC's oversight responsibility that the monetary value had to be distorted to avoid public outrage.
It's time to get rid of the handout known as the grandfather clause (slush fund), institute some much needed transparency , close the loopholes for the elite few, enforce the rules and to end the deceit of the American people.
Thank you,
Thomas Reilly