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The way I think you are trying it in Reader won't give you want you need. If you want to hide the data in the XML email submission (from email submit button), you need the newer capabilities in Designer 10.x to encrypt the submission. The XML contents will look like this after it is encrypted:

<?xml version="1.0" encoding="UTF-8"?>

<xfa:data xmlns:xfa="http://www.xfa.org/schema/xfa-data/1.0/"

><EncryptedData xmlns="http://www.w3.org/2001/04/xmlenc#" Id="encrypteddata_2" Type="http://www.w3.org/2001/04/xmlenc#Element"

><EncryptionMethod Algorithm="http://www.w3.org/2001/04/xmlenc#aes256-cbc"

/><KeyInfo xmlns="http://www.w3.org/2000/09/xmldsig#"

><EncryptedKey xmlns="http://www.w3.org/2001/04/xmlenc#"

><EncryptionMethod Algorithm="http://www.w3.org/2001/04/xmlenc#rsa-1_5"

/><KeyInfo xmlns="http://www.w3.org/2000/09/xmldsig#"

><X509Data

><X509Certificate

>MIICRTCCAa6gAwIBAgIKNvzDsAiaeyPYFDANBgkqhkiG9w0BAQUFADBTMREwDwYDVQQDEwhKb2hu

IERvZTEJMAcGA1UEChMAMQkwBwYDVQQLEwAxGzAZBgkqhkiG9w0BCQEWDGpkb2VAYWJjLmNvbTEL

MAkGA1UEBhMCVVMwHhcNMTExMTAzMjA1MjAwWhcNMTYxMTAzMjA1MjAwWjBTMREwDwYDVQQDEwhK

b2huIERvZTEJMAcGA1UEChMAMQkwBwYDVQQLEwAxGzAZBgkqhkiG9w0BCQEWDGpkb2VAYWJjLmNv

bTELMAkGA1UEBhMCVVMwgZ8wDQYJKoZIhvcNAQEBBQADgY0AMIGJAoGBAL12YAntp+1ZzsNpew5H

+s5fwLjK3TdiFfMrJuV1jEG2xlvJPOvKujSeR+4iHlBTQbYxkZ5nvhkwQi9KDgeriuMjg/TclkJP

CD0h//4fnP4tQqTUAZ92r6nMRqFxviEhysETMQl01SGDUlmSjhvWJctPU+krq+wwuwVbPJgU8Iu5

AgMBAAGjIDAeMA8GCSqGSIb3LwEBCgQCBQAwCwYDVR0PBAQDAgSQMA0GCSqGSIb3DQEBBQUAA4GB

AK+TIhyZZtYtxrVz5lq/zl8mczRnUCsJcapXJhY/oJnN2izALPAYnA4eBr7LBbl1Hf12op+LJuoU

j5FHhB+eQzKlhqkC/alFwmGdxCBYUfpZKWGBUuuW+00mTCStsmTIaSi/XS6K+Y5+0fqAJ48y56lb

o/kjbxSjzHWszfeOzafF</X509Certificate

></X509Data

></KeyInfo

><CipherData

><CipherValue

>ADk2Kxut+M84Pi4B1ZC9znKFCz2rAfHYZNZ76fWK/eRE5QMC0NhCnQ5gFfrOLU9Wl/5FOTZMwQab

F1PjdKaVys0TjOR51HH1A6D/ZUf7baBQ1XnKRW5kQR8xePwwDaRoyBopF8+XeWA6d8yRXvyZdLJa

Hju2/gUR/M2HArKCtso=</CipherValue

></CipherData

></EncryptedKey

></KeyInfo

><CipherData

><CipherValue

>uiKSewcq2Of8cIk7hRnjFmOpTo+XxN6AZM5PyT+k2d1mUuBlbJWxCk37EFiwVHRH5n4oOQkuFFhv

+jopOPQLbthkdhiDzWHmAJhstaPcbvA=</CipherValue

></CipherData

><EncryptionProperties

><EncryptionProperty xfa:processingRule="replacementContent"

><form1

/></EncryptionProperty

></EncryptionProperties

></EncryptedData

><signatures

><Signature xmlns="http://www.w3.org/2000/09/xmldsig#" Id="datasignature_2"

><SignedInfo

><CanonicalizationMethod Algorithm="http://www.w3.org/2001/10/xml-exc-c14n#WithComments"

/><SignatureMethod Algorithm="http://www.w3.org/2000/09/xmldsig#rsa-sha1"

/><Reference URI="#idbfea09cc-7f34-11e1-9c29-002710682eb5" Type="http://www.w3.org/2000/09/xmldsig#SignatureProperties"

><Transforms

><Transform Algorithm="http://www.w3.org/2001/10/xml-exc-c14n#WithComments"

/></Transforms

><DigestMethod Algorithm="http://www.w3.org/2000/09/xmldsig#sha1"

/><DigestValue

>O9E5XR6E+tkicSPa6HTZgkE9qhE=</DigestValue

></Reference

><Reference URI=""

><Transforms

><Transform Algorithm="http://www.w3.org/2002/06/xmldsig-filter2"

><XPath xmlns="http://www.w3.org/2002/06/xmldsig-filter2" xmlns:dsig="http://www.w3.org/2000/09/xmldsig#" Filter="intersect"

>here()/ancestor::dsig:Signature[1]/../..//. |

here()/ancestor::dsig:Signature[1]/../..//@* |

here()/ancestor::dsig:Signature[1]/../..//namespace::*</XPath

></Transform

><Transform Algorithm="http://www.w3.org/2000/09/xmldsig#enveloped-signature"

/><Transform Algorithm="http://www.w3.org/2001/10/xml-exc-c14n#WithComments"

/></Transforms

><DigestMethod Algorithm="http://www.w3.org/2000/09/xmldsig#sha1"

/><DigestValue

>v9suUKmCN2M3JeTTr2y5/L6ZY64=</DigestValue

></Reference

></SignedInfo

><SignatureValue

>DYCW4mlxVOr+EmleCo56aohSGw93gtk2Wc5Rb7zlB8ukTSC9lozQM1rGLv4GykpQ+Ln+XhKCzVqv

Z7jcISv2l+1rWWpBSyhve+szoWSoY90SEtPUwnJMwxeOy6fOyGx5MWCqVj6D308Pcu2dw7r3UMqc

i6rSWUezvsPjfCBrcW8=</SignatureValue

><KeyInfo

><X509Data

><X509Certificate

>MIICRTCCAa6gAwIBAgIKNvzDsAiaeyPYFDANBgkqhkiG9w0BAQUFADBTMREwDwYDVQQDEwhKb2hu

IERvZTEJMAcGA1UEChMAMQkwBwYDVQQLEwAxGzAZBgkqhkiG9w0BCQEWDGpkb2VAYWJjLmNvbTEL

MAkGA1UEBhMCVVMwHhcNMTExMTAzMjA1MjAwWhcNMTYxMTAzMjA1MjAwWjBTMREwDwYDVQQDEwhK

b2huIERvZTEJMAcGA1UEChMAMQkwBwYDVQQLEwAxGzAZBgkqhkiG9w0BCQEWDGpkb2VAYWJjLmNv

bTELMAkGA1UEBhMCVVMwgZ8wDQYJKoZIhvcNAQEBBQADgY0AMIGJAoGBAL12YAntp+1ZzsNpew5H

+s5fwLjK3TdiFfMrJuV1jEG2xlvJPOvKujSeR+4iHlBTQbYxkZ5nvhkwQi9KDgeriuMjg/TclkJP

CD0h//4fnP4tQqTUAZ92r6nMRqFxviEhysETMQl01SGDUlmSjhvWJctPU+krq+wwuwVbPJgU8Iu5

AgMBAAGjIDAeMA8GCSqGSIb3LwEBCgQCBQAwCwYDVR0PBAQDAgSQMA0GCSqGSIb3DQEBBQUAA4GB

AK+TIhyZZtYtxrVz5lq/zl8mczRnUCsJcapXJhY/oJnN2izALPAYnA4eBr7LBbl1Hf12op+LJuoU

j5FHhB+eQzKlhqkC/alFwmGdxCBYUfpZKWGBUuuW+00mTCStsmTIaSi/XS6K+Y5+0fqAJ48y56lb

o/kjbxSjzHWszfeOzafF</X509Certificate

></X509Data

></KeyInfo

><Object

><SignatureProperties Id="idbfea09cc-7f34-11e1-9c29-002710682eb5"

><SignatureProperty Target="datasignature_2"

><PROP_Sig xmlns="http://ns.adobe.com/pdf/2006" type="cabinet"

><M type="text"

>D:20120405113353-04'00'</M

><Name type="text"

>John</Name

></PROP_Sig

></SignatureProperty

></SignatureProperties

></Object

></Signature

></signatures

></xfa:data

>

In the Designer version you have (8.2), you only have the capability to sign the data or the entire form, which will not hide its values in the XML file that gets sent.