September 15, 2005
Dear SEC and NASD
There is an URGENT need for a change to NASD rule 3360 which requires NASD broker/dealers to record and report the number of short sales outstanding on given securities so the NASD can publicly disseminate that information. The rule needs to be changed so it requires the same short sale reporting for all Pink Sheet and OTCBB stocks as is already required for exchange and NASD issues. Without this kind of protection those of us who invest in these small developing companies are left unprotected and are subjected to drastic price manipulations caused by fraudulent behavior that goes unexposed.
I currently own stock in a development stage company (DCUT - Warner International Networks) that has been a persistent target of fraudulent short sellers over the past couple years to the point where the stock currently has virtually no value. But still it trades millions of shares a day. I believe there are literally hundreds of millions of fraudulent shares being traded on this security, but without a change to this rule there is no way to expose the crooks who are doing it or know exactly how severe the problem is.
If the SEC is not willing to provide the public at least this minimum level of protective oversight of the trading of these securities then they should not authorize them to be traded at all. A formal request (petition) for a change to NASD rule 3360 has been submitted to the SEC and NASD by Pink Sheets. PLEASE MAKE THIS CHANGE TO THE RULE ASAP!
Thanks you for you consideration of our concerns,
Herb Kirchem