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94 Dogwood Dr.
December 21, 2003 Mr. Jonathan G. Katz
Dear Mr. Katz: This letter is regarding the proposed Regulation SHO. I am a proprietary equity trader with Trillium Trading with over 10 years of experience on Wall Street. In my professional opinion I feel that the new proposal will do much more harm then good in providing fair and orderly trading in the marketplace. If the proposal were to pass it would create an opportunity for market manipulators to insert artificial big bids on upticks without the fear of them getting hit by short sellers. Under the current rule if someone was willing to artificial inflate a stock he would run the risk of getting hit by a short seller therefore deterring the entity from doing so. In essence the market would police itself. If the rule were to change to the new proposal a market maker or specialist can enter a huge order on an uptick bid and risk only getting executed by someone liquidating an already existing position. The new proposal will open the flood gates for people to enter bid orders of astronomical size that have no other intention but to only make it appear like the stock is strong. With no short sellers allowed to hit the uptick bid the manipulators risk is virtually non existent and as a result the likelihood of market manipulation increases. I am positive that this is not the goal of Regulation SHO or your commission. As a seasoned trader I am well aware of the tricks market makers and specialist play to increase their already huge advantage, but this new opportunity could create an advantage that will cause havoc in the markets that your committee may have overlooked. In my 10+ years on the street I have worked on trading desks, commodity floors, and investment banking departments and I can say as a professional trader I am well aware of negative connotations my brethren have received over the years. There is one thing I can tell you though is 99% of the traders I have met are decent individuals who are just trying to make an honest living trading the markets on a daily basis. We provide liquidity in the market no different to any market maker or specialist. I hope that your commission will greatly consider not introducing Regulation SHO because it will flat out do much more harm then good. Thank you for your time and I hope your commission reviews all the ramifications diligently and thoroughly. Sincerely, Anthony Lamme
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