Subject: File No. S7-08-07
From: Robert Keenan
Affiliation: CEO, St Bernard Financial Services, Inc.

May 29, 2007

The proposal to add a paragraph to Rule 15c3-1 to provide that a broker/dealer could not stay in business if it were deemed insolvent is a total waste of time and rule making authority because a firm cannot stay in business while insolvent under existing net capital rules.

Under Rule 15c3, no broker/dealer may stay in the business of transacting securities trades if their net capital is below minimums. If the B/D is insolvent, they would by definition be below net capital.

A broker/dealer in Chapter 13 would not be able to work itself out of bankruptcy, but rather would be liquidated at a great loss of value to the firm's assets. A working B/D has much greater value than one completely closed to business.

I also question whether a bankruptcy judge would set this rule aside because it would interfere with the trustee's ability to perform his duties, namely to preserve the value of the assets in the bankruptcy.

For the life of me I cannot see why this is not a duplication of existing rules.