April 20, 2007
Dear Securities and Exchange Commission,
Thank you for giving me this opportunity to express my opinion on these important matters. I am torn between continuing to endorse the obvious course of action, to eliminate the illegal Reg SHO grandfather clause and companion crooked market mangler exception, versus changing course and promoting the continuance of this dynamic duo of criminal protection mechanisms.
Reasons to eliminate the grandfather clause and market maker exceptions include:
1. It is always good when our law enforcement agencies enforce the law.
2. I do not like it when law enforcement protects criminals that steal from me.
3. Crime is bad.
Reasons to keep the grandfather clause and market mangler clause in effect:
1. If the two are eliminated, it will give half of all investors the false assurance that stock counterfeiting has been dealt a final blow. Nothing could be farther from the truth as data continues to be hidden from issuers and investors while ex-clearing and desked trades escape all tracking mechanisms. Therefore, I am concerned that investors will incorrectly think electronic stock counterfeiting has been eliminated. I am concerned the movement of law-abiding citizens will be diminished because they simply are not aware of the root cause of this financial terrorism in our US Stock Market system.
2. I want Overstock.com and brave companies like them to win their civil lawsuits against stock counterfeiters. I want the grandfather clause to be in effect so the plaintiffs attorney can click on that Reg SHO threshold list webpage and completely expose the corruption that has been inflicted upon Main Street America for a decade. While it's not critical that plaintiff's company appears on the counterfeit list during trial, it would just make it so much sweeter if it was.
3. I want the illegally adopted grandfather clause to stay in effect long enough for Overstock.com and brave companies like them to bring commensurate recognition to this financial terrorism so there may be criminal charges filed against the few hundred crooks that game the system. Further, in order for criminal charges to be filed against SEC employees that continue to look the other way, I think I would like this crime to stay in progress for awhile longer. Keep the grandfather clause in place so the GAO or maybe someone with balls in the Justice Department can place the cherry on top of the already interesting US Senate findings on the SEC handling of market participants with JUICE. That is another reason I really hate to see the grandfather clause go away so soon, after only 2 years of protecting criminals.
4. I like to see people that make their living protecting crooks when they are in front of the Senate every six months squirming on the illegal naked short selling questions. I like to see them sweat, and then resign before their follow up visit. I know it's sad, and just plain wrong, but there are a still a few of us unwashed Americans that like to see wrong doers punished, and embarrassed so we may have some source of entertainment in this lopsided battle. I would miss that if the grandfather clause and market mangler exception were eliminated too soon.
Although the SEC and I may have differing opinions on how to regulate criminal activity, we do have one thing in common. I am CONFLICTED between the pros and cons of eliminating two of the most obvious violations of securities law, as that action could further obscure the underling root cause of the crime. I am concerned that would make it more difficult for Main Street to further expose criminals that need to be supervised from behind bars.
Finally, I want to congratulate Overstock.com shareholders on their important achievement today. You have endured 500 Days of market manipulation. Your condition has been documented by law enforcement, and for the world to see. You are the poster child for this corrupt government experiment to protect profits generated by RICO act gangs at all costs.
Moreover, all the while your company survives because you have one of the most ethical CEOs in the world. Victory shall be sweet for you, and I will join in the celebration of your success in this classic good versus evil showdown.
Patrick Byrne you are our Arnold Schwarzeneger in this real life version of "The Running Man" reality show. The SEC keeps putting you on that sled- shooting you down into the bowels of the earth to be murdered by a never-ending supply of corrupt bad guys. YET, you keep finding more friends down there, and resurface to fight another day. I am hopeful this SHO will reach a similar conclusion to the 1987 movie The Running Man. This time with Patrick Byrne slamming the evil, lying crook into the subterranean sled - then sending HIM into the bowels of the earth as a good time is had by all.
Live long and prosper my fellow American Patriots at Overstock.com
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Press Release Source: Overstock.com, Inc.
Overstock.com Marks 500th Consecutive Trading Day on the SEC's '13-Day' Regulation SHO Threshold List
Friday April 20, 1:12 pm ET
Company Submits Second Comment Letter to SEC on Proposed Amendments to Regulation SHO
SALT LAKE CITY, April 20 /PRNewswire-FirstCall/ -- Overstock.com, Inc. (Nasdaq: OSTK - News; www.overstock.com) yesterday appeared on the Regulation SHO threshold list for the 500th consecutive trading day.
The Regulation SHO threshold list, mandated by the SEC in January 2005, was an attempt to curb abuses associated with naked short selling. Published daily by the exchanges (e.g., NYSE and NASDAQ), the list contains the names of companies whose stock broker dealers have failed to deliver stock sold in quantities above a calculated threshold.
In adopting Regulation SHO and in establishing the list, the SEC stated: "Naked short selling can have a number of negative effects on the market, particularly when the fails to deliver persist for an extended period of time and result in a significantly large unfulfilled delivery obligation at the clearing agency where trades are settled."
Overstock, the company now longest on the threshold list, believes that by any standard other than geological, 500 days is an "extended period of time."
"It took seven days to create the cosmos, it takes nine months to make a baby, but after 500 trading days Wall Street and the prime brokers still can't deliver stock they are selling to Main Street America," said Patrick Byrne, Overstock chairman and chief executive officer. "For 500 trading days, brokers have taken investors' money yet refused to deliver what they sold -- in this case, shares of our stock. Anywhere else but Wall Street the perpetrators would be behind bars. Instead, apparently, they are at bars, discussing stuffed shark art collections while scoffing at regulators and Americans who trusted their savings to their brokers."
Over nine months ago, the SEC proposed two reforms to Regulation SHO: elimination of the "grandfather provision," and a tightening of the close-out requirement under the market maker exception. The SEC has yet to take action on this proposal, but instead rather recently re-opened comment period on these proposed amendments at the request of three people who wished to have more time to examine data that has been in the public record for over six months.
Overstock has submitted a second comment letter to the SEC on the proposed amendments to Regulation SHO (see http://www.sec.gov/comments/s7-12-06/s71206.shtml for a list of all public comment letters submitted to the SEC on the proposed amendments). In its letter, Overstock continues to support immediate adoption of the SEC's proposed changes and to urge the SEC to adopt quickly two additional measures to close known loopholes: (1) require prompt disclosure of the current volume of failures to deliver, and (2) require a firm pre-borrow prior to all short sales. Both of these additional measures were also supported by members of Congress, state legislators, executives, academics, business organizations, and public companies.
"Perhaps we should have a list of companies that the rule of law does not protect," said Byrne. "Oh wait -- we already do It's called, 'the SEC's Regulation SHO threshold list'."
About Overstock.com
Overstock.com, Inc. is an online "closeout" retailer offering discount, brand-name merchandise for sale over the Internet. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory liquidation distribution channel. Overstock.com, headquartered in Salt Lake City, is a publicly traded company listed on the NASDAQ National Market System and can be found online at http://www.overstock.com.
Overstock.comŽ is a registered trademark of Overstock.com, Inc. All other trademarks are the property of their respective owners.
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Source: Overstock.com, Inc.