March 5, 2008
Mr. Christopher Cox Chairman, SEC
re: 3/4/08 | Dow Jones By Judith Burns
DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--U.S. securities regulators voted 3-0 on Tuesday to propose a new rule intended to crack down on lingering abuses involving so-called "naked" short sales and failures to deliver shares that have been used in such sales.
Mr. Cox,
We shall see.... unfortunately there is no penalty established within this new rule to penalize traders who continually abuse the system and unfortunately Market makers and brokers will not be held liable as well. "Brokers who engage in short selling for customers would not face any new obligations under the proposed anti-fraud rule, and the SEC said it would not apply to market makers engaging in market-making activities."
Honest traders and companies need penalties enforced on Brokers or MM's who engage in naked short selling without assuring that the trader has adequate free trading shares to cover the short sale before the sale is made. In addition, the SEC should set up a naked short selling hot line and shareholders and public trading companies should have access to the new anti-fraud rule HOT LINE to identify the suspected naked short sellers by naming the MM or Broker, company shorted, date and time of the abuse.
These crooked naked short sellers have bankrupt 100's, if not 1000's of start up companies by illegally reducing the stock value and therefore the ability of a viable start up companies to grow by establishing its value through normal business development. This crime, I am sure has financially ruined 100,000's of people.
I urge you and you fellow commissioners to establish penalties for traders, Market Makers and Brokers who violate the intent of this new rule, and I also urge you to establish a Hot line for companies and shareholders to contact this new anti fraud team to identify said violators.
Thank you for your attention to this matter,
Carroll Hagan