From: Yahya Piracha [yahyapiracha@hotmail.com]
Sent: Tuesday, December 30, 2003 12:14 PM
To: Rule-comments@sec.gov
Subject: File No. S7-23-03

Dear Sir/Madam:

I am writing to you to voice my opinion on the comment paper, which includes
potential new rules for short selling that severely curtail investors' ability
to go "short".  In my opinion, selling and short selling are required components
of a healthy market and without them, there is a real danger of the public
suffering at the hands of those individuals who would see stock prices at
unrealistic levels to futher their own ends.

I believe:

„h The system as it stands works well and should not be changed. That changes
would only upset the delicate balance that prevents stocks from becoming
unrealistically priced.

„h We want the right to freely sell short and believe the ability to invest on
both sides of the market is a necessary and legitimate facet of a balanced
system.

„h The recent singling out of sellers is unjustified and that people who have
suffered declines in their share value need to look to whether the companies
were overvalued in the first place. It is human nature to want to believe our
loss was because of forces beyond our control.

„h We object to recent efforts on the part of special interest groups to sway
public policy by encouraging letter writing campaigns among shareholders based
on false accusations and by hiring priced lobbyists to push the interests of
stock promotion groups.

„h The policy of ˇ§full, plain and true disclosureˇ¨ only works if the average
investor can use the information both to encourage and debunk companies and the
products they bring to the market.

„h Sellers prevent markets from becoming too thinly traded by adding necessary
liquidity and short selling often drives market trading that in turn assists all
investors. That in many cases without the liquidity created by short selling
that many small companies would not be able to obtain the necessary capital they
need to survive.

„h To concentrate instead on the abuses present in the small cap market on the
company side. Abuses that often underwrite unethical and illegal activities in
the markets by these same companies that are complaining. Abuses such as cheap
stock issuances through the abuse of exemptions; the use over and over of the
same transfer agents by scams, and the lack of qualifications or financial
hurdles to becoming a transfer agent; the ability of companies to withdraw from
DTC and leave investors stranded; the ability of market makers to continue to
quote markets for stocks that have ceased to disclose on a timely basis in some
cases for so called ˇ§ captured clientsˇ¨, etc.

„h The SECˇ¦s fears, as outlined in the comment paper published November 1st and
they quote, ˇ§ The commission is also concerned with the impact this proposal
may have on small issuers. Please provide data to quantify the costs to small
issuers and potential investors in these small issuers, including whether
reduced short selling opportunities may make the securities in these markets
more susceptible to having overvalued stock prices.ˇ¨ are justified and likely.

„h A common characteristic of overvalued small issuers is a collapse of
distribution orchestrated by the insiders and that any further burden on short
sellers will only help fraudulent schemes and companies.

„h Trading market is a minute-to minute exercise and that any new complicated
arrangements, which must precede a sale, will only discourage a free and open
market.

„h We agree with Lawrence Harris, the SEC chief economist, who has said, ˇ§
singling out short sellers for possible market manipulation is akin to turning a
blind eye to other blatant forms of fraudulent behavior. Efforts to regulate
short selling to prevent manipulation have an unsavory impact upon the other
type of manipulation which is the pump and dump.ˇ¨

I certainly hope that the SEC will reconsider the potential new rules for 
short selling.

Yours sincerely,



Yahya Piracha
426 Weldrick Road East
Richmond Hill, Ontario, Canada
L4B 2M5

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