Subject: File No. S7-30-04
From: Don Johnson

From: Don Johnson []
Sent: Monday, October 25, 2004 9:09 PM
Subject: Registration of Hedge Fund Advisers

Dear Chairman Donaldson,

I am a shareholder in Novastar Financial, Inc. (NYSE:NFI), a small company that has been the subject of gross manipulation by hedge funds. I and many other NFI shareholders applaud your efforts to hold hedge funds more accountable by letting some daylight shine on their activities.

Information regarding the manipulation of NFI can be found at which was created and is maintained by investors in response to the massive shorting of NFI and the apparent collusion between hedge funds and some media publications.

I urge you and your fellow SEC commissioners to adopt a rule requiring hedge fund advisers to register with the SEC.


Don Johnson