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To: LLCF who wrote (60438)	7/21/2008 3:09:34 PM
From: The Vet	Read Replies (1) \| Respond to of 78438

DAK... What you seem to be prepared to admit is that selective enforcement is OK but some (maybe even most) of the participants do follow the rules. You can't offer a single example of a prosecution by the SEC over a failure to deliver under Reg SHO, but seem to accept that it's OK to let the rogues prosper because they only hurt a small proportion of the market, even though the real numbers are impossible to determine. It has already been pointed out that astute MMs can delay delivery without triggering a Reg SHO posting for 13 days, and then "roll over" the position for a further 13 days without any indication to the general public that the failure occurred and continues. Failures to deliver always go through broker dealers regardless of whether the transaction which caused it was initiated by one of their customers or not. They know what has happened to cause the fail and they facilitated the illegal trade. They also can remedy it with a buy-in as mandated by the rules. They don't do it. Why not?

To: LLCF who wrote (60438)	7/21/2008 3:15:38 PM
From: tyc:>	Read Replies (1) \| Respond to of 78438

>>"NO ONE would borrow if they thought they didn't have to..." But why do the brokerage houses have to borrow to provide stocks for their institutional clients to short ? Don't they have a very large inventory in margin accounts ? And when they DO use margined stocks as supply, doesn't it STAY with them.... just moving to another brokerage house where they are "available for borrowing" ? Do institutional clients carry away the stock they buy, or just leave them with the brokerage houses as we do ?

To: LLCF who wrote (60438)	7/21/2008 3:25:14 PM
From: The Vet	Read Replies (1) \| Respond to of 78438

The last word from me - not my work, but a direct quote from the SEC web site... "Currently, threshold lists include the name and ticker symbol of securities that meet the threshold level on a particular settlement date. Some investors have requested that the SROs provide more detailed information for each threshold security, including the total number of fails, the total short interest position, the name of the broker-dealer firm responsible for the fails, and the names of the customers of responsible brokers and dealers responsible for the short sales. The fails statistics of individual firms and customers is proprietary information and may reflect firms' trading strategies. The release of this information could be used to engage in unlawful upward manipulation of the price of the securities in order to "squeeze" the firms improperly. " sec.gov Emphasis mine.. Obviously the SEC believes that naked short selling resulting in failure to deliver is a legitimate "trading strategy" and not an illegal activity. They refuse to disclose the guilty or act on the matter to avoid losses by the firms who engage in such activities. Never a mention or a thought for the shareholders who suffer losses due to these "trading strategies" which while outside the letter of the law are protected by the SEC.