11616 Hawthorne Bl., Ste, 206
11824 Daphne Ave.
Hawthorne, Ca 90250
Harvey L. Pitt
450 Fifth Street, NW
Washington, DC 20549
Office of Investor Education and Assistance
I am writing you in reference to a Form 211 which is being submitted to Nasdaq (NASD) in accordance to Rule 15C211(h), a written request to quote a security on the Pink Sheets, which does not constitute a fraudulent, manipulative or deceptive practice as comprehended by said rule.
I am submitting this letter as a petition, from an issuer acting in the capacity of an intrastate dealer, as defined by Section e(a)(5) of the Securities Act, in 1 state (see Intrastate Broker-Dealer @ NQB.com) who filed a Form 211 with NASD, requesting the Commission to make a determination and/or amendment to current statutes.
I am the CEO of PortalVia, Inc. (PV), a satellite/wireless communications corporation located in Hawthorne, CA. I have underwritten a U-7 Scor Offering which has been filed with the Securities and Exchange Commission (SEC), as well as Form D. (See included Offering Circular). I have also filed the Form D, U-1, U-2 and U-7 with the State of California, as well as filed and paid the fees associated with the Regional Public Offering (25102(f)) - see included offering circular.
Unlike on the National Association of Securities Dealers (NASD) OTC Bulletin Board, Issuers are not required to be SEC reporting and current in their reporting requirements for a market maker to quote their securities in the Pink Sheets or Yellow Sheets. Even though PV is not required to do so, we are a fully reporting and compliant corporation. (see enclosed March and June 10Qs)
The first line of the "Form 211 General Instructions" clearly state the form is to be completed "to initiate or resume quotation in the OTC Bulletin Board" Service, the National Quotation Bureau (NQB) "Pink Sheets", or any other comparable quotation medium.
PV's Ticker Symbol in the Pink Sheets are PLVAP.PK (CUSIP # 736189 AA9 - AB7) for Preferred Series "A" Convertible Bond/Stock, and PLVA (CUSIP # 736189101) for common stock. The Transfer Agent (Margo Ankele) for the securities is Computershare (303) 984-4102. The securities have sold for and have a stated value of $1 and $.25 respectively.
The reason for the submission is to record the historical stock trade transaction information for public reporting purposes and make the information more readily available for current and potential stockholders, thus creating a more and well informed, liquid market and stockholder base.
The origin of the Direct Public Offering (DPO) began near the end of Jimmy Carter's Presidency, as now, with the country in a recession. "David Birk, from MIT, was able to prove, rather convincingly, that small businesses were creating almost all the new jobs in America. As now, the big and old Blue Chip companies are the ones laying off workers. Even moreso, as is evident today, it is the large Blue Chip companies deeply intwined in fraud, accounting scandals, and litigation battles, not the small companies.
Thus, as rule 15C211 places the responsibility on a Broker/Dealer to obtain and keep in its files, certain information about an issuer before initiating a quote for an issuer, this cannot be said to be an effective measure to prevent fraudulent, deceptive and/or manipulative practices, as is evident in today's markets.
Therefore, since a Broker/Dealer is reliant upon the accuracy of information provided by an issuer, the submission of information, rather directly by the issuer, or indirectly by a Broker/Dealer, via a Form 211, should be allowed and viewed as the same, as the information originates from the same source and will be reviewed with the same scrutiny in either scenario. Unless, in some instances, some securities are treated differently because of the persons filing the documentation, and reviewed with a little more scrutiny under a closer eye or microscope, which I don't think is the case, or furthermore legal.
What's more, Broker/Dealers are specifically prohibited from accepting any remuneration as compensation for filing and quoting (sponsorship of) a security on a Form 211. This does not indemnify the broker/dealer from potential liabilities suffered from losses in securities litigation suits. This does not create an incentive for a broker/dealer to sponsor a Form 211 for issuers, but does create an undue burden on issuers.
The Small Business Investment Incentive Act of 1980 (SBIIA), which supported Dr. Birk's findings that small business were creating most jobs, was passed specifically for the purpose of helping small businesses.
A big ingredient of SBIIA was a Congressional "instrument", to the SEC to make it easier for small businesses to raise money from the public. In 1982, the SEC passed Regulation D. The revolutionary Section of Regulation D, that makes DPOs possible, is Rule 504. In 1989, state regulators announced SCOR (Small Company Offering Registration), a system developed for 504 (DPO) Offerings. Form U-7 was also introduced and is currently accepted in 45 states as the preferable vehicle to register securities in a 504 Offering.
Allowing issuers to file Form 211, at least for the initial quotation of securities, would make it easier for small businesses to raise money. As the underwriter of a few offerings, the obtainer of a few CUSIPs and a Transfer Agent, as well as the payer of the associated fees, this task is not short, easy, nor cheap for a small issuer. Much more, the criminal deterrent of federal prison sentences for fraudulent dealings is sufficient to deter wrong doers. But, after all the checks and balances inherent in these processes, there still is the hurdles of obtaining sponsorships of the Form 211, in a security when no broker/dealer has an obligation or incentive to sponsor any such type of said security. Broker/Dealers are not Certified Public Accountants (CPAs) and cannot be held accountable for accounting and securities fraud, only stock manipulative schemes which are perpetrated by broker/dealers anyway.
To summarize, including upon written request from the issuer, there are enough checks and balances to prevent issuers from conducting fraudulent, deceptive, or manipulative acts or practices without barring issuers from directly submitting the initial Form 211 and initiating quotations on securities. This view is also supported and outlined by counsel in the attached comment and proposed revision to SEC Rules 15C211 and 17a-4 document. Please respond accordingly and state the SEC's opinion, ruling or determination in regards to this matter. Thank you, sincerely, for your time, consideration and cooperation.
In closing, I will summarize Alan Greenspan, "Unless the curve is towards a fair ecosystem, we cannot achieve our full potential...The focus should be on the functioning of our ecosystem... Corporate governances broke down...due to Once-in-lifetime frenzy."
Most respectfully submitted,
Bill Blair, CEO
Cc: Isaac C. Hunt, Jr.
Cynthia A. Glassman
Formal written request to: Bill Blair, 11824 Daphne Ave.,Hawthorne,Ca 90250