Subject: File No. S7-08-08
From: george c vlahos
Affiliation: Superintendent of Schools, Avon, Ma. retired.

March 20, 2008

ladies and gentlemen: I am a stockholder in On2 Technology, for 8 years, during which time I have watched this company grow to the point where its products are now ubiquitous, having been installed in virtually every desk top computer in the world, enabling the Flash series of encoding systems to deliver the best, least expensive method of streaming video, consuming the smallest amount of power,to computers and similar devices all over the world. This enabling software system is now in the process of becoming the most widely adopted medium for encoding and transmitting live video without buffering i.e. instantaniously, over the internet, to mobile devices such as cell phones etc.
Since the change in the rule forbidding short sales of stock on the downtick, effected July 7th, 2007, the price of this stock has been under relentless, highly organized attack,systematically driving the price of this stock down by simultaneously controlling the Ask and Bid while trading, essentially with itself or confederates, in such a manner that ordinary investors have been victimized to the point where they have abandoned their efforts to buy the stock because they know that the price will be immediately and summarily, driven down below where they bought it.
I have sent over 250 timely, email messages to Peter Pizzani from May/June (when the short interest in this stock went form 2 to 5 million shares to 12 to 18 million shares)calling his attention to what I believed were illegal and manipulative sequences of trades as they were happening. Whether or not Attorney Pizzani or anyone else at the SEC ever looked at what was going on is unknown to me.I must note that the file number assigned to my original complaint dated 6-15-2007 is File # HO1227278--this was when Atty. Pizzani was assigned to this complaint.
I also sent an email to the chairman--Christopher Cox dated September 21, 2007 calling on him to rescind his action of July 7th, 2007, which I believe was the immediate enabling change in regulations resulting in the ongoing short(much of it naked in my opinion) attack on the stock of Ont and many other companies. I have seen no evidence that anyone has done anything to police or stop the activity, which reeks of illegality, continuing to this day.
How anyone can possibly justify the selling of stock, borrowed from a someone who is only the custodian of same for the actual owner defies reason. Among other things, this actually multiplies, falsely, the acual number of shares in existence. This practice should be terminated forthwith regardless of how long it has been countenanced by our governmental, regulatory agencies, including the SEC. A stock can only have one owner at a time--is this logical or not?
Also, to use shares of stock owned by someone else for the purpose of driving the value of those shares down defies any sense of logic or fairness that even the man in the street would understand.
To add insult to injury then, for a government agency responsible for ensuring a "fair, honest and open market" to permit certain professionals to sell nonexistant shares, counterfeit shares, as it they were real ones is unbelievable collusion in a subterfuge and fraudulent practice which makes the ordinary investor a helpless victim of predators enabled by the guardians of the public trust to create a false picture of supply and demand in the market for the real shares of companies listed on the exchanges.
I am calling upon you to totally eliminate all of the unfair,dishonest and hidden practices known as short selling completely from the markets and restore the fairness, honesty and openness which we investors thought characterized the market for stocks. I would also call upon you to ensure that no one enjoys any advantage over the ordinary investor in the daily trading of stocks via any hidden privilege extended for any reason such as the promotion of the socalled liquidity in the markets.
I also call upon you to take these actions with due haste since so much damage has already been done, we can not endure anymore---we have been severely damaged, some have lost their nestegg in the current maelstrom which has been going on for so long. There is just no acceptable excuse for what has been done to us ordinary investors by the privileged few enabled by your agency. Their is no reasonable excuse for waiting any longer for comments--I have read many of them already on file--the evidence is available for your perusal every day on the ONT Level II site on Ameritrade---if you cannot see what I see every day and see that it is what I described in my many emails to your agency and that it is baldfaced, blatant manipulation of the market in this stock then you are not competent to deliver the protection which you are intended to in the management of the stock market.
Thank you for this opportunity to address your agency on these critically important matters to the ordinary investor and the overall integrity of a market which is so vital to our national economic wellbeing. gcv.