From: dkahn [dkahn@mail.kahnlawchicago.com]
Sent: Tuesday, November 18, 2003 5:50 PM
To: rule-comments@sec.gov
Subject: File no S7-19-03




I write you as President of the Capital Market Reform Initiative, a not for 
profit organization.  The fundamental  problem in our capital markets is the 
absence of true checks and balances needed to counter the powerful self which 
motivates those who dominate those markets.  While File no S7-19-03 is not 
nearly enough, it is a step in the right direction.  

As things stand now, boards are dominated by management–the supervised  select 
and control their supervisors. The lacks of checks and balances has damaged 
our economy through massive mis allocations of resources.  It damages our 
democracy because those  who control our capital markets are unelected and 
largely unaccountable and they control vast amounts of public resources.  
This gives them a huge power over our government.  

The proposed rule will not solve the problem.  Far more fundamental changes 
are needed to prevent the abuses with which we are all to familiar.  Far more 
sweeping and thoughtful changes are needed.  Director slating is tantamount to 
election  Neither management nor incumbent boards should be involved in slating 
unless the shareholders fail to slate.   Significant changes are needed in 
the voting mechanism. Until such changes are possible I see the proposed 
rule as a plus and I therefore urge its adoption.  

 

David B Kahn