From: Steve Salter [bosco@nts-online.net]
Sent: Wednesday, June 12, 2002 8:16 PM
To: rule-comments@sec.gov
Subject: comment

This evening I saw Harvey Pitt on PBS Newshour.  His purpose was to
announce / promote a recent set of rules that are now out for comment.

Since his comments on the Newshour rambled a bit, I'm not sure what
exactly the set of rules he was comment contain....but I would like to
comment on his comments.

My comments deal with three issues:

First, he talked about going after CEO's (exec's) and holding them
'personally' responsible.  The purpose of this was to increase investor
confidence.  I am (or was) a stockholder in at least two firms that the
SEC 'went after.'  My experience is that your 'help' to me as an
investor resulted in me (as a stockholder) paying huge legal costs to
defend the CEO/firm.  Then, as a stockholder I paid fines and penalties
to resolve these problems.  In both cases, you were supposedly 'after'
individuals (specific individuals) for committing illegal acts.  As a
stockholder, I certainly did not authorize these individual to commit
these illegal acts.  Yet, when the defense and punishment took place, I
was expected to pay.  It seems to me that the SEC could benefit by
drafting an passing regulations which separate the exec's from the
company with respect to the commission of illegal acts.  The company
should be prevented from paying for defense and from paying fines when
these individuals are found to have committed illegal acts.  I have no
problem with reimbursement when the individual is found innocent.  But
the money should come from the individual until he/she is found
innocent.  The way the system works now, the stockholder gets punished
for the illegal activities of the employees.  The two specific companies
I am thinking about here are Gliatech and ICN Pharmaceuticals.  In the
latter case, it took us a long time to get rid of the CEO who cost us
all this money.  You could have made this a lot simpler by putting the
responsibility on the people who actually commit the crimes.  I believe
some EPA reg's are actually written this way.

Second, Pitt talked about getting more information out to the individual
investor.  I think that Reg FD was designed to handle this.  In
listening to numerous conference calls, I can not tell you how many
times I've heard that a question could not be answered because of Reg
FD.  I have read parts of this regulation on your web site.  The
regulation seems to say that if the conf. call is open to all, scheduled
ahead of time, and widely advertised.... that almost anything can be
announced.  My experience on the other hand, indicates that less
information is getting out....not more.  I must assume that the favored
folks are also getting less information.....

Third, I have a problem with the interaction between the way the SEC and
FDA operate.  Whereas, the SEC seems to think I should know what the
firms I 'own' are doing, I am repeated told (or hear on conf. calls)
that the firm can not talk about where things (e.g., drug development)
stand because of fear of reprisal from the FDA.  Clearly, when one is
invested in a developmental pharmaceutical company....one needs to have
some idea where the development of the new drugs stands.  In open
forums, one never gets an answer....  Whereas, I am aware of numerous
cases of individuals being given more specific information during
one-on-one conversations.  The questions being asked are not
unreasonable.  I'd like to have the SEC and FDA put out some sort of
joint rules on what can (and must) be disclosed on these matters.  The
FDA should then be prohibited from 'punishing' firms which stay within
these rules.

Thanks for listening to my comments.  If you desire further
clarification, please contact me.

Steve Salter
Midland, TX