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U.S. Securities and Exchange Commission

The following comment on Letter Type G,
or variations thereof, was submitted by
17 individuals or entities on S7-23-03.

Letter Type G:

RE: File No. S7-23-03. - Regulation SHO

Dear Securities and Exchange Commission,

I oppose Regulation SHO as it is now written. I am concerned that it will cause financial chaos in the markets, especially in the Bulletin Board market unless other steps are taken to prevent unfettered abuses by unethical stock promoters.

Short selling is a necessary part of the market as it is the only true counter measure to stock promotions. I believe unless short sellers can effectively borrow stocks or be allowed to short sell naked, troubles within the micro-cap markets will grow far worse.

In addition to opposing the elimination of naked short selling, I favor the following measures to reduce abuse within the markets.

  1. Eliminate all toxic funding. Allow private placements at any price but require public disclosure (press releases) for any sales at less than 85% of market price.

  2. Require more complete disclosure of all promotional compensation including the name and relationship of any party paying for promotion. Additionally all disclosure must accompany any published information.

  3. Require any offshore corporation providing funding to a public company must also disclose all parties with a beneficial interest in the offshore corporation.

If the SEC decides to eliminate naked short selling then I recommend these additional measures to mitigate the losses which I feel will occur.

  1. Require full Directors and Officers insurance for any company trading on the Bulletin Board.

  2. Establish minimum standards for a company to trade on the Bulletin Board. Those standards must include:

    1. Minimum non-affiliate float equal to at least 35% of the total issued and outstanding.

    2. Minimum of 100 non-affiliate shareholders, each with a minimum position of at least $1,000 prepaid cash invested.

    3. Minimum of at least 60% of the float in street name in order to qualify for bid and ask quotations. If street name stock falls below this level, then a work out market will be established.

    4. Establish either a bounty/ reward system or contract for outside professional due diligence watch dog services to offset the reduction of independent investigation now provided by professional short seller.

Yours truely


Modified: 05/18/2004