March 26, 2008
It is 4:04 pm Wednesday, March 26th, 2008---I just have witnessed for the umpteenth time, a blatant and illegal act in the trading of the stock of ON2 Tech. With the stock bouncing back and forth between 1.06 and 1.07 most of the day with a furious flurry of sales at the bid during the last minute of the day and two trades going through at 15:59:59 and 16:00:08 at 1.07--- a trade then crossed at 160018 at 1.02====while the bid was 1.06 and the ask at 1.07.
THIS IS CHARACTERISTIC of the type of manipulation of the close for the day that has been going on for months. The same type of manipulation also characterizes the Opening trade virtually every day. The ordinary investor will see the close as .05 lower than is actually the case and act accordingly in weighing any subsequent trading action. Whether this trade was by a marketmaker or a short seller or both, it should have been seen by the SEC as prima facie evidence of the game being played only because shortselling by privileged parties is ignored by the SEC. To see this trade in its real context one must monitor a whole day of trading which I believe the SEC is not doing.
I, personally, have sent over 250 messages to Peter Pizzanni since last June calling on him and you to look at these manipulative actions --AS THEY WERE OCCURRING--which would have convinced any rational person of the fact that the shortselling was being conducted in an organized, systematic, programmed manner by an entity privileged with the right to do so--eg. marketmakers, specialists and confederates and others who could afford to trade all day without regard to costs of trades (which retail traders cannot do).
Contrary to the implications of your questions in the subject proposal for changes to the rules, there is no evidence that either market makers or others are promoting liquidity in the market because they are allowed to sell shares that they do not own. One only has to watch the daily trading to see many gaps of as much as 10 minutes between trades with the subsequent trade price remaining at the bid and with no change in the price for long periods of time and the trades being used to hold the price down and at the bid. Furthermore, most of these trades are for 100 shares---no retail investor could afford to be buying and selling 100 shares of a one dollar stock, all day long while paying $9.95 per trade.
I ask you who could be doing this and expect that if you are sincere in protecting the integrity of the market that you would have long ago tried to find this out. It is evident in the communication from Ms. Katz, SEC official to one investor, that you have not only not done this but that you are convinced that there is no need to do so because there is no problem in the market due to short selling.
Your method of collecting comments on proposed rule changes is designed with a built in bias towards the professionals, who in turn have a strong bias against any rule restricting them to the same rules of the game as retail investors. Also, the effort required for a novice retail investor to even find out about your rule change proposal system guarantees a distorted return on your requests for comments favoring those who profit most from your rules---professional traders who feed on managing fear and greed, the big drivers of market action.
There is little faith out here among the retail investors that you will heed our call for fairness, honesty, and openness in the market---few of us will be heard from and the majority wisdom is that the only hope for change will be at the ballot box and you can rest assured that it will be on its way if the current and past deaf ear continues to be our lot. I pray that someone among you will have the guts to shout, that, in regard to the whole Short sale issue "the Emperor has no clothes" and get on with eliminating the whole charade. NO SHORT SALES BY ANYONE---NO SALES OF ANY STOCK BY ANYONE BUT THE ONE AND ONLY OWNER. Anything less cannot be prevented from being abused.