Subject: File No. 4-606
From: Jeffrey M Swarts
Affiliation: Independent Investor

July 27, 2010

To protect and enhance transparency and accountability in the financial markets Congress should and must strengthen laws and regulations related to fiduciary duty to the ownership of companies. Debtholders, convertible or not, should not be allowed to short circuit these duties by offering post-bankruptcy positions to managers who have failed to protect the property of prior ownership. Any corporate officer involved in a bankruptcy, should not be allowed to serve again as a corporate officer for at least two years following the emergence of the new company. Any corporate assets dispersed to corporate managers within 5-years of a Chapter 11 filing, should be disgorged and returned to the debtors' estate.

The restrictions for bondholders should be changed to require all convertible debt instrument purchases to be disclosed by distressed debt investors and passed on by financial advisors to their clients. Bond conversions to equity in restructuring should be tightened to prevent bondholders from betting on and working for insolvency by "buying" corporate managers with the promise of continued employment and stock options in the restructured company.

Naked short selling should be eliminated by statute and prosecuted when it does occur. Beneficial shareholders should be restricted from loaning out their shares to short sellers, from onshore or offshore accounts. Any financial advisor who participate in such schemes should lose his license.

Intangible assets in bankruptcy, such as intellectual property, should be valued by independent professionals at debtor expense. Financial advisors should be required to provide this information to their clients.

Allegations of insider trading at hedge funds should be vigorously investigated and enforced. Any SEC attorney who receives significant evidence of wrongdoing should be disbarred if he/she does not vigorously investigate allegations. Financial advisors who engage in any such activities should lose their license to practice for life.

The DOJ rules for when a bankruptcy Judge must recuse himself for conflicts-of-interest should be strengthened and codied by Congressional statute. Repeated bias in a bankruptcy proceeding by a Judge should lead to the impeachment and disbarment of the Judge by a higher court.