Subject: File No. 265-28
From: Christian Rafool
Affiliation: Investor

May 4, 2013

Members of the Investor Advisory Committee,

I have written to you a couple of times, and will continue until the committee and the SEC can make some real progress on protecting investors from High Frequency Trading.

I would like to showcase the HUGE disconnect between the Committee, SEC and Main Street investors. I am sure you have all seen Mary Jo White, Chair of the SEC message posted on the front page of the Investor Advisory Committee's web page where she thanks the committee for protecting investors, maintaining fair, orderly and efficient markets. It is exactly the language you would like to see and the kind of thing any run of the mill advertising/website creator would suggest be done.

A wise man said "Actions speak louder than words". So how has the SEC and current committee done? Well let's ask a wise man. Who do I consider a wise man? Well he would be widely recognized and respected by his peers and be held without question to be ethical, intelligent, thoughtful, highly successful in both business and investing, and educated. I think Charley Munger, Vice Chairman and co-creator of Berkshire Hathaway, founder of Munger, Tolles Olson Law Firm and graduate of Harvard Law School might fit the bill.

Charlie Munger appeared on CNBC Friday, May 3, 2013. The following is his comments on High Frequency Trading:

" I think it is very stupid to allow a system to evolve where half of the trading is a bunch of short term people trying to get information one millionth of a nanosecond ahead of somebody else," Munger said.

"It's legalized front-running. I think it is basically evil and I don't think it should have ever been allowed to reach the size that it did," he said. "Why should all of us pay a little group of people to engage in legalized front-running of our orders?"

You can see it and read it for yourself by going to the following link:

Wow. I think if you asked Mr. Munger how the committee and SEC is doing in regards to Chair White's message that he would probably respond negatively. Of course, I might have misread his position, but words like "stupid" imply to me ineffectiveness, ignorance or neglect and "evil" implies unfair, theft and dishonesty. You get the idea.

By the way, Charlie Munger is not the only wise man to comment negatively regarding HFT. His partner Warren Buffett, Dick Grasso, Leon Cooperman and a host of others has the same stance. True some do not call it "front-running", but a "tax on small investors" according to Warren Buffett.

So I hope at the next regularly scheduled meeting (of course you can wait for it rather than call a special meeting. What is a few more bucks skimmed from the little guy going to do?) to actually work on protecting investors, insuring efficient and fair markets. It can be done simply by implementing 3 quick steps.

Step One, Move the quotation of stocks from "Penny increments to a minimum of a Nickel". Step 2: Reinstate the "Uptick Rule". These can be done in a day. Step 3. High Frequency Trading proponents argue that they provide needed liquidity to the markets. Okay, then rules and regulations should be created. If their role is to provide liquidity in the market and it is a necessary and beneficial role then it cannot be done on a voluntary basis. They should be required to act and abide by the rules of stock market "specialists". They can not be allowed to just exit a market and injure investors. The are to provide liquidity and will make and lose money in this endeavor. It is their choice to participant once their are rules. It is totally voluntary.

That is it. Nothing complex to understand. It fits Chair White's message to the committee and SEC. It does hurt the current HFT's one sided gift by making them actually risk capital in their honorable desire to provide their benevolent market liquidity. It is time they pay the tax and not the little guy or gal

Now, you might want to call a meeting