September 19, 2008
To the commissioners of the SEC.
Dear Sirs,
I am dismayed that you would consider bowing to the bleating of the options OMMs and reinstate their precious naked shorting exemption.
Just remember why you ended it in the first place: Crooks are buying puts and selling calls to create a synthetic short position, and thus renting the OMMs exemption to effectively naked short the underlying stock.
There is nothing wrong with owning synthetic short positions - as long as they are hedged with real short positions and not naked short positions.
Sirs, you are pledged to protect the interests of real investors. Market makers are not investors, are not necessary in this day and age of computer matched trading, and should not be protected. Do away with them all. Let real investors make the bid and the ask, then we will have a real market and not a crooked one.
If you reinstate the OMM exemption at the behest of the foxes in the henhouse, I can see that John McCain is going to have to fire more than the Commissioner to correct things at the SEC. To borrow his phrase: "We will know their names"
faithfully,
Paul W. Dent