September 30, 2005
Dear SEC:
There is a crisis facing the OTC market today in the lack of short sale position reporting and disclosure for OTC issues. This lack of transparency regarding short selling in the OTC market allows fraudulent acts to go undiscovered and manipulative short sellers to hide.
I believe regulators should fix the problem. Small issuers traded on the Pink Sheets and the OTCBB deserve the same transparency and regulatory oversight of short selling as those listed on Exchanges or NASDAQ.
Please amend NASD Rule 3360 and require NASD broker dealers to maintain a record of total "short" positions in all customer and proprietary firm accounts in all publicly traded equity securities as well as report this information to the NASD for public dissemination of the short positions by security.
I personally have been financially hurt by short selling in the past in positions like hdy when it was hypd before it moved to amex, as well as gxxl before it became msnc.
Thanks for your consideration of this matter.
Sincerely,
Scott Paterson
Jersey City, NJ