Subject: File No. 4-590
From: Douglas F Russell

September 29, 2009

I was with the Wall Street research firm of H.C.Wainwright Co. in the 1070's. Pacific Mutual, Capital Research Management, and The Bank of New York were amongst my clients. I have actively followed markets ever since.

After the uptick rule was removed two years ago I immediately noticed disruptive trading in several smaller company stocks.

The problems were two fold and they were particularly effective when used against small cap companies.

In some cases what appeared to be huge selling binges drove downwards the price of shares in companies where nothing particularly good or bad was happening. Shortly thereafter, buying would set in and soak up the shares from dispirited shareholders who were stampeded into selling because they could not figure out what was happening.

The other ploy which appeared to take place would be a steady string of small sales always hitting whatever 100 share or 200 share bids were put forward. The price would dribble downwards for a period of time. Again, there would be no negative news background to justify this stream of selling. Then suddenly big buyers would appear.

I am doubtful that this type of trading behavior was simply coincidental.

In both cases the net result was for the big player to milk the value of people's holdings by gaming the market.

I would strongly urge two changes to the current stock trading rules:

1. Restore some form of the uptick rule to make it harder for big players to game the market.

2. Impose some sort of tax designed to limit very short term trading. I would suggest something like a 5 cent per share tax on a trade lasting less than a day, four cents if sold in day two, three cents in day three, etc.. This should be imposed whether the holder gained or lost in the transaction. It would drive away those who have no purpose other than to manipulate a share price.

Such moves would not be welcome to those who have profited from abusing the concept of fair valuations for equity holdings. However, if our markets are to work efficiently and be trusted over the longer term, we need to drive out abusive trading.

Some amounts of capital will not flow into markets where certain players hold huge sway over valuations and use that sway to milk all participants.

Truly I feel today's markets have a large element of abuse and several people I know, some with substantial portfolios, no longer participate in stock investing for precisely this reason. Having been burned by such trading, I now seldom will touch a small cap stock.

Thank you for your attention.