From: bd [dedrickb@comcast.net]
Sent: Monday, January 19, 2004 12:15 PM
To: rule-comments@sec.gov
Subject: S7-02-04: 

I applaud the attempt to protect investors from themselves and unscrupulous 
sales practices, but I feel it does not address the debilitating practice of 
short selling and/or controlling prices by single or multiple brokers. trades 
which are held to keep prices within a range by exercising the higher price 
first then the lower price to maintain control. the trading by brokers with 
each other to fill an ask price by purchasing at a price other than bid or ask. 
 
when the price of a penny stock is rising you will note a lower price is entered 
by a broker to make sure the price of the stock will not rise so as to cost the 
broker the necessity of covering.  when a legitimate company is in the throes 
of raising capital and the brokers are allowed to manipulate the price of the 
stock, it may very well force the new company out of business. 
 
I have followed this practice for over two years now, and am appalled that 
nothing is done about it by the sec.  no stock should be permitted to be shorted 
until it's finances are in a position to deal with this (at best) rather negative 
action which can only  hurt a company of any size let alone the startup companies. 
 
while it is important to be sure the investor is dealing with a legitimate STARTUP 
COMPANY, it is MORE IMPORTANT that these unscrupulous brokers (and you know there 
are many) are not in a position to destroy them. 
 
                                                    sincerely
 
                                                William a. Dedrick