One Step Ahead

[Ignutz]

November 21, 2003

Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Re: File No. S7-23-03 - Regulation SHO

Dear Mr. Katz, Commissioners and Staff:

This letter is in response to the Securities and Exchange Commission's ("SEC") request for comments on proposed Regulation SHO, which is intended to reform current short selling rules and regulations and, in part, to curb market abuses related to illegal "naked" short selling.

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Conclusion

Again I would like to commend the SEC for acknowledging the problems associated with "naked" short selling and settlement failures in the U.S. securities markets, and for putting forth a proposal to "curb these abuses." I strongly urge the SEC to fulfill its Exchange Act mandate and "stop short selling abuses" wherever they occur, by (i) requiring trades to timely settle, with forced buy-in's for failures to timely settle, whatever the cost and with additional real pecuniary and restrictive punishments for violators, (ii) applying the new rule to market makers and specialists, who are-based upon their current behavior-likely to abuse any exemption, and (iii) applying the "uniform bid test" to all securities markets (instead of only exchange listed securities), and specifically applying this rule to market makers and specialists, as well as everyone else.

The Proposed Rule and comments thereto indicate the SEC recognizes many of the problems. The SEC has the opportunity to do the right thing and put an end to these abusive and destructive practices. Please do it now, so that it won't have to be done again later after still more companies have been destroyed and still more investor wealth has been stolen by the market manipulators and their enabling industry partners.

Sincerely,
H. Glenn Bagwell, Jr.
Attorney at Law

http://www.rgm.com/articles/godwin.html