Subject: File No. 4-590
From: Randall M Woith
Affiliation: Average Investor

February 24, 2010

To whom it may concern,

The opening sentence in the Mission Statement of the SEC reads as follows:

The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

To this end, I would definitely say that the SEC has been a abject failure in fulfilling this mission. This proposed rule change is simply one more example. I am a day trader, and have been for over 20 years and if I have learned one thing over those 20 years it is that the stock market is Programmed to go up The other thing I have learned is to completely ignore reality and if you are wanting to survive – follow the money.

All one has to do is to spend about 30 minutes perusing your proposed rules and the comments that are submitted to quickly understand who has the ear of the SEC. Clearly it is NOT the average small investor. What the SEC seemingly fails to understand is that the small investor Assumes that the SEC is there to protect their interest. They could not be further from the truth. Every proposed rule is formulated around input from Experts representing Wall Street Institutions. Lets cut to the chase and stop the charade, Wall Street Institutions interests are NOT Main Street Interests.

All one has to do is look at any profit report from Goldman Sachs, J.P. Morgan, the list goes on and on to learn that roughly 80% of their profits come from proprietary trading operations trading their own accounts. The stock market is a zero sum gain and these profits have to come at the expense of someone. That someone is the average small investor

The SEC is now proposing that the Uptick rule or some version of it be reinstated. I am all for enforcing rules that make it illegal to Naked Short the market. There are already laws on the books addressing this and they should be rigorously enforced. That said, it is NOT the small individual investor who is doing the Naked Short Selling, it is the very institutions and hedge funds who are trading AGAINST the average investor. Rather than addressing the real issue, the SEC appears to deceive the public by pretending this rule change will actually be to their benefit. It will not The fact of the matter is that these very same institutions and hedge funds have all sorts of other mechanisms to short the market that are not instruments commonly used by the average investor. Primary among these are index futures contracts, options and individual stock futures. Additionally, these very same institutions and hedge funds have access to Dark Pools of liquidity which are Non Transparent and Non Regulated. They will simply go into these dark pools and continue to short stocks with impunity since the SEC refuses to do the right thing and make these Dark Pools Illegal. Instead, the SEC once again relies on Industry Experts input which state that Dark Pools are necessary to provide liquidity and protect the confidentiality of large investors B.S.

All this proposed rule will do is prohibit the small investor from participating in short selling. Any available shares to borrow will be snatched up by large institutions and when the little guy comes in and wants to sell something short, they will be told there are no shares to borrow, Sorry.

Frankly, this is just one more example of the SEC being in bed with the large Wall Street firms while Pretending to be looking out for the little guy. If the SEC were TRULY concerned with the little guy they would:

(1) Demand that FASB reinstitute mark to market accounting standards rather than allowing these large institutions to defraud investors by reporting outrageously inaccurate profit statements. By doing so investors would at least know the TRUE value of whatever it is they are invested in rather finding out After the investment declined significantly that what the company had been reporting was a Total fraud.
(2) Eliminate Dark Pools of liquidity. The public Deserves equal access to information with respect to the markets. This includes knowing how many shares of a certain instrument are being traded. The fact that these dark pools are non transparent makes them impossible to regulate so any rules that apply to the rest of us do not apply for all intents and purposes.
(3) Eliminate High Frequency Trading and Predatory Quant Trading Programs. The very idea that firms like Goldman Sachs are allowed to Sniff Out orders of individual investors and intercept them prior to them reaching the exchange to be executed, and then Front Run them is absolutely outrageous Anyone else would go to jail for such activity, but the SEC ignores this practice, or Is Looking Into it The servers should be unplugged IMMEDIATELY and the practice should be illegal. This is of course WHY the Dark Pools are necessary, so that these firms can Front Run individual orders and by doing so, skim pennies or fractions of pennies on every share traded. While it may not sound like much, the fact is it allowed Goldman Sachs to profit over 100 MILLION dollars a Day on more than 60% of the days last quarter. And whose 100 Million Dollars are those – YOU the small investor that the SEC is supposedly working to protect
(4) Finally, when wrong doing is actually Accidentally discovered by the SEC, impose penalties that actually punish the perpetrators. The latest example of this would be the Settlement between the SEC and B of A. What a JOKE One needs no additional proof than this settlement to see who the SEC is looking out for. Even the Judge who ruled on the case, Judge Jed Rakoff, called it Half Baked Justice AT BEST The SEC is more concerned with Martha Stuart and her 40 thousand dollars than the tens of Billions of dollars B of A defrauded investors out of – What A Disgrace

Bottom Line, this proposed uptick rules is just the latest example of the diversion being perpetrated by the SEC. While they Pretend to be looking out for the average investor, virtually Every Ruling is based on input from Industry Experts who have only one interest – Enriching Themselves. Make no mistake people, this rule will not serve the purpose it is being served up for your consumption to represent, you have been warned.