Subject: File Number 4-573

October 28, 2008

The United States Supreme Court has held since the 1940s that the value of a security is to be determined by a reasonable expectation of profits to be derived from that security. The US Securities Exchange Commission has held for almost as many decades that the only valuable measure of those reasonable expectations was the price the open market was willing to place on a security. The Commission has routinely ignored one of the primary factors in determining fair value and that is that the parties to the transaction have reasonable knowledge of the relevant facts.

On September 30, 2008, the Commission, along with the Financial Accounting Standards Board, issued guidance allowing management to value a security based upon internal assumptions (e.g. expected cash flows), utilizing observable as well as unobservable inputs. The Commission goes on to say that the determination of fair value often requires significant judgment, presumably by management.

Given the Commissions reluctance in the past to use any form of valuation other than observable market prices, how is the Commission going to enforce these new regulations? Where will the funds come from to allow the Enforcement Division to retrain its agents in valuing such esoteric instruments? And finally, isnt the Commission stating by issuing its September 30, 2008 guidance that all relevant information used in determining the value of a security does not have to be known to all parties?

John G. Black