Subject: File No. 265-28

June 25, 2012

Dear Ladies and Gentlemen of the Committee,

I am optimistic that this committee will right so much of what is wrong with the stock trading and exchange rules of today. This committee was created by the Dodd Frank bill for the protection of the "retail" or "mom and pop investor". You are very important. Remember the following fact: The SEC nor Wall Street want this committee. Don't believe me? Ask yourself why it was necessary for the committee to be created not by the SEC, but rather by Dodd-Frank legislation. Please don't allow so-called industry and agency veterans to misguide or diminish your role and above all don't let them stall you. You need to run from the start.

Why? Let me start by saying I am not an alarmist, but someone that works with the investors that you are here to protect on a daily basis. I have many years of experience working with them. I see and hear from them and they have lost confidence. It is clear from both personal experience, fund flow data, newspapers, magazines and financial cable news. In a nutshell, the average Joe or Grandmother out there believes stocks are a scam. They believe it is a rigged game and that only a select few players control the game. The headlines scream it, and they do it daily. It is absolutely terrible that this is how the average retail investor feels about stock investing.

Fact- It isn't the first time the average retail investor felt this way. A great book to read is "Reminisences of a Stock Operator". In the early 1900s, the exchanges lacked rules to curb large investors from creating volatility that was intended to scare the "mom and pops" from their holdings. Stock manipulators would allow time for "mom and pops" to build a position in a particular company and after a period of time they would then use their size to run the stock up and then down creating panic in the uniformed and inexperienced investor who fled the stock losing his savings. The little investor regained confidence when rules where established that were designed to prevent manipulation and restore order to the markets and retail investors came back. It is obvious that not all volatility can be removed, and I don't advocate for that. What I do advocate is that the markets be precluded from being operated like a casino.

So what happened? Why all of the volatility? Well, I think Dick Grasso, former Head of the New York Stock Exchange, said it best in his September 11, 2011 appearance on CNBC from the floor of the New York Stock Exchange that morning. Fortunately for you, this video can be viewed and it holds a golden standard for your committee to operate by and to hold the feet of the SEC to the fire.

That day, Dick spelled it all out. You see in late 2007 regulation went into place by the SEC that basically unwound some of the protections made for the Mom and Pops, reorganized the pricing of stocks, and left void needed rules for a new type of market manipulator. You see there was a rule called "The Uptick Rule" that was created after 1929. You see back in the old days the way regulators worked was they interviewed those players that profited from the "Great Crash" and asked them how they did it and what would have stopped them. The answer was the "Uptick Rule" this was a rule that made a short seller what for a real buyer to buy a stock before he could short it again. It was designed to prevent rapid fire orders from over coming a stock and slowing things down to keep order. The SEC had many researchers look into the rule and after several white papers later said it didn't do anything. I don't believe a single mom or pop was invited and asked how volatility would affect them. No I beleive there was a bunch of theorists, exchange members and other insitutional investors. So volatility doesn't scare the elite. The elite embrace it for they understand it, and can use it. Who can't use it? Your grandmother and grandfather don't understand it and one of the rules on the books for them was taken away. Score one for the big boys

The exchanges and SEC ever on the hunt for saving investors money have them literally pinching pennies and forcing mom and pop to throw dollars away. The exchange left pricing stocks by fractions and went to pricing down to the penny. Wow there is virtually no friction cost. The spread between bid and asks was removed from those costly 1/8 of a point to a penny This is fantastic if you are a day trading grandmother or grandfather like so many of them are as well as the vast majority of investors. I am obviously being sarcastic. This peny spreads allows for an interesting type of market participant to emerge.

Hello, High Frequency Trader, the exchanges love your rental income from storing your computers on the exchange floor in order to jump in front of my grandmothers orders, they as well as the prime brokers love yourtrading volume which now makes up more than 60% of the daily volume and the rich institutional investors that you manage money for love that on extremely volatile days you make tens of millions of dollars and that you can disappear at a moments notice since you have no rules or obligations. Warren Buffett recently commented on HFT as being nothing more than creating a tax on the ordinary investor. A tax Wow, this is terrible. These High Frequency Traders place million of buy and sell orders for they can when they cancel the vast majority almost immediately and scalp a penny or less to make a profit. They could not do it when we had fraction pricing. They can do it now. So why let them exist? The overwhelming word is they provide liquidity for the market, and investors allowing for better execution. Leon Cooperman, former head of Goldman Sachs Asset Managment and now Head of Omega, wants them gone and banned. You see the liquidity that they provide is "USELESS" or "Uneconomical". What? Yes, please have SEC Chairman Schapiro explain how someone jumping in fron of my orders and taking a penny or a fraction of a penny and holding my order for less than a second. Yes, I said less than asecond benefits me or my grandmother. Also, ask her what happens if they stop trading in the middle of trading session and that liquidity disappears. Could you get a flash crash? Never had a flash crash before, but now we get them. Way to go What is most important is if they truelly believe the HFT add liquidity to the markets them make them operate under the very same rules as a specialist. They shouldn't be able to just blow out of the market, and they should not be allowed to have preferential treatment to locate their computers in the exchanges. So how do you reverse course simple, the exchanges can reverse the quotation of stocks to the penny and slow trading down by moving quotation down to a "nickle". Wow, that is right I want my grandmother to pay 4 whole pennies more per share that she buys or sells rather than have her scared out of her wits by a flash crash

The great way to return the invidual investor back to the table is your committee. They don't want you there. They sent the individual investor packing back in 2007 in favor of "geeks with calculators" and their bosses big wealth insitutional investors and exchanges. Dick Grasso said "Slow the Ferraris down". You can do that by doing three things together. Please note I said together for just one is not enough. They are as follows: 1.) Bring back the "Uptick Rule". It did nothing then it is no harm to bring it back. 2.) Mandate that stocks be priced in "nickles" and not pennies. Rapid fire orders made and cancelled have no economic benefit for the investment community but rather tax the investment community. This doesn't stop them it just doesn't make their unfair trading and access no economical like mom and pop's have had it for almost five years now. 3.) High Frequency Trading firms should have rules preventing them from just dropping out of the exchange if they really are beneficial for the exchange. That is the catch. Uptick has little benefit according to SEC but they removed it. So put it back for a little benefit is better than none. The HFT are a benefit to the liquidity of the exchange according to the SEC and Exchanges then manadate they can not just come and go as they please. A benefit is a benfit and is not optional.

The golden rule of Dick Grasso, the famous and successful former head of the NYSE, is that with every change of the rules you have to ask the following:

"How will this change affect the little old grandmother with the $2,000 401(k) plan?" He said "if we can insure she would be okay then we knew so would everyone else". The mom and pops, my grand parents and yours did not ask for rapid fire execution that saved them pennies but created volatility not seen since the exchange had no rules that causes them to lose their nest egg. Shame to those sophisticated volatility tolerant survival of the fitest types found in lofty places, and let us honor and protect those that aren't given a seat at the table.

Your at the table let them hear you Good luck, and God Bless