From: Dave Jonsson
Sent: June 15, 2007
Subject: File No. 4-538

I believe that 12b-1 fees were originally intended to help no-load mutual funds market their products. For some reason, load funds were permitted to offer 12b-1 funds where the fund companies advanced a full load to selling brokers and then repaid themselves by deducting annual fees from the fund. Selling brokers often marketed 12b-1 funds as "no load", which made them an easy sale. Eventually, regulators cracked down on abuses and sales of 12b-1 funds declined. However, somehow along the way load fund companies gained permission to deduct small annual 12b-1 fees from load fund investments. As a former broker who sold load funds only, I regarded such fees as too minor to really matter. I did not switch customers out of funds outside of a fund family. I witnessed a good bit of fund churning by other brokers where I was employed. If a 25 basis point 12b-1 fee would keep such brokers from churning their less knowledgeable customers, I'd be all for it. But since I don't think it would, I would scrap 12b-1 trails. Good brokers don't need them, and they're not significant enough to deter bad brokers. Dave Jonsson, Seminole, FL