Matthew S. Crain
1004 East Kerr
Apartment 207
Urbana, Illinois  61801
Champaign County



April 28, 1997
File No. S7-07-97

Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549

Dear Jonathan G. Katz,

The following comments on the proposed changes to Rule 144
were part of a class assignment at the University of
Illinois College of Law.  Although the only experiences I
have had with Rule 144 were in the classroom, I feel that
comments from every source may  contain guidance.

The Commission's purpose for removing the manner of sale
requirement contained within Rule 144 is to "facilitate
innovation in the methods used to resell restricted
securities, such as the useof electronic bulletin boards."
It is my opinion that the proposal to amend Rule 144
removing themanner of sale requirement will have five
adverse effects.  First, issuers will suddenly be able
toengage in much less regulated solicitation of purchasers.
Second, this lack of regulation may havethe effect of
reducing the protections afforded to non-sophisticated
investors.  Third, issuers mayattempt to rely on Rule 144 in
order to explore ways of creating new methods of
resellingrestricted securities with no statutory or
regulatory guidance.  Fourth, this lack of guidance
willpotentially open the Commission up to an enormous amount
of litigation. Fifth, it will be moredifficult for the
Commission to monitor the operation of Rule 144.

In the past, when the Commission decided to explore a new
field of regulation, new rules werepromulgated which were
designed specifically to regulate and control the new field.
If the rulewas successful, it continued.  If there were
problems with the rule, it was either amended orrescinded.
A good example of this practice in action is Rule 144.

"When Rule 144 was adopted in 1972, the Commission noted
that it was experimental in natureand would be rescinded or
amended, as necessary, based on actual experience."
Clearly, the otherproposed changes to Rule 144 are due, in
part, to the Commission's realization that
investorprotection would not be harmed by the proposed
changes.   However, the proposal to eliminatethe manner of
sale requirement drastically changes the protections offered
by Rule 144.

It is my opinion that Rule 144's manner of sale restrictions
should remain in order to preventwide-spread solicitation
(distribution) by issuers, protect non-sophisticated
investors, and preventsecurities holders from exploring new
methods of reselling restricted securities without guidance.

As for the fourth possible problem with removing the manner
of sale restrictions, I believe that theCommission would be
better served if it studied the possibility of creating a
new safe harbor ruledesigned specifically for new,
innovative methods of reselling restricted securities, such
as the useof electronic bulletin boards.  This course would
prevent the Commission from being inundatedwith litigation
by confused and unguided sellers of restricted securities.

In addition, if problems arose due to the removal of the
manner of sale restriction, it would bemuch more difficult
for the Commission to remedy those problems.  Using Rule 144
for a newpurpose would make it much more difficult for the
Commission to monitor the operations of Rule144 and to make
changes in order to remedy problems.  A rule specifically
designed to governnew methods of selling restricted
securities would give the Commission more effective
monitoringcapabilities as well as a more direct method of
correcting problems.

I hope that my comments may be of some help to you.

Sincerely,

Matthew S. Crain