From: Bill Miller
Sent: Tuesday, June 25, 2002 9:26 PM
To: rule-comments@sec.gov
Subject: Proposed Rule: Form 8-K Disclosure (File No. S7-09-02)

I am the Chief Executive of Legg Mason Funds Management and manage or 
supervise the management of over $20 billion of assets, ranging from those 
of individual investors to large pension funds. In our flagship fund, we 
manage the assets of over 400,000 shareholders.

Our firm strongly supports the proposed changes that would improve 
disclosure of insider transactions.

As value investors, we seek companies that sell at a discount to intrinsic 
value. Insider purchases and sales are a key indicator of management's 
beliefs about the relative attractiveness of owning their stock. Yet current 
rules have allowed insiders to delay reporting of some transactions until 45 
days after the beginning of their fiscal year. Even the typical delay until 
the 10th day of the following month is unnecessarily long given advances in 
technology that allow rapid collection and dissemination of such 
information. The proposed faster reporting would both protect investors and 
promote fair dealing.

We do not believe, though, that any public purpose is served by segregating 
disclosure by amount. Under the current proposal, transactions or loans of 
$100,000 or more will have to be reported within 2 business days. If the 
amount is, for example, $99,000, the deadline is extended by a week. For 
amounts below $10,000, it does not have to be reported until it aggregates 
to $10,000. We think this gives people an incentive to break transactions 
into smaller amounts to delay the report. Moreover, having amounts under 
$10,000 deferred serves to potentially obscure activity that may be 
significant. For example, many insiders from one company could be buying or 
selling, yet if each individual's transactions aggregate to less than 
$10,000, no report would be required. We think that all transactions or 
loans should be subject to the same standard, regardless of the amount. If 
the report can be made in two days for amounts over $100,000, it can be, and 
should be made, for all amounts.

The improved disclosure on loans and guarantees to officers and directors is 
particularly important. Lack of timely disclosure in the past has allowed 
directors to approve (and then later forgive) sometimes even gargantuan 
loans. Rapid disclosure, and potential public embarrassment, exerts a 
moderating influence on directors that helps to prevent abuses.

We particularly support greater disclosure of 10b5-1 plans. Under the 
current standard, shareholders are in the dark about amounts, timing, etc. 
Since these plans can be changed frequently without current disclosure, 
important information may be obscured. Having the plans, and especially 
changes to the plans, publicly disclosed is in the public interest.

Two other items deserve special mention:

1. To eliminate confusion and duplication while still requiring rapid 
reporting, the 8-K disclosure of insider transactions should be reported 
using the current Form 4; no later Form 4 filing would then be necessary.

2. The date of expiration should be added to the requirements for 
derivatives disclosure. The implications of an insider exercising options 
that are many years from expiration is far different from one who exercises 
options about to expire.


Sincerely,

William H. Miller, III
Chief Executive Officer
Legg Mason Funds Management, Inc.