Date:    4/6/99  2:20 PM

Subject: File No. S7-5-99

I am opposed to the proposed amendment to Rule 15c-211. 
     
I believe that the SEC is well-intentioned in its efforts to combat 
microcap fraud, but fails to recognize the impractical and onerous burden 
this amendment would place on legitimate market makers. Under these 
amendments, the responsibility of regulating and policing small company 
issuers, whether reporting or non-reporting, would effectively shift from 
the SEC to the market makers who trade in these stocks.
     
Market makers who choose to continue trading these issues would either risk 
unlimited liability for the accuracy and truthfiilness of financial 
information over which they have no control, or have to undertake the 
significant additional costs related to effective due diligience on each 
and every issue for which they make a market. Still, they would leave 
themselves open to crushing lawsuits from plaintiffs' attorneys and 
disgruntled investors anytime a stock turns down.
     
No legitimate market maker is going to accept that responsibility. Instead, 
if this rule is implemented,  legitimate market makers cease to quote OTC 
Bulletin Board and "Pink Sheets" stocks.
     
The end result means no liquidity for small company stocks and, 
consequently, a loss in price transparency, bigger spreads, a drop in stock 
prices -- and less protection from fraud for microcap investors!
     
In fact, according to respected Business Week investment commentator Gary 
Weiss, this rule would play right into the hands of scam artists who 
manipulate stock prices, since they would dominate the microcap market once 
legitimate traders pulled out.
     
In short, these proposed amendments would irreparably damage both the 
markets and the companies whose securities are traded in these markets. 
     
Please see that this Amendment is not passed.
     
Thank you
     
Carl O'Baugh
PO Box 158
El Toro, CA.92630-0158
(714)825-0072