From: James Hendricks [James_Hendricks@msn.com]
Sent: Saturday, March 08, 2003 5:16 PM
To: rule-comments@sec.gov
Subject: SR-DTC-2003-03

Companies which elect to exit the DTC system are doing so often as a last 
resort to protect themselves from rampant abuse. Taking away this option 
from companies is akin to collusion with the naked short sellers. Companies 
should be allowed to leave the DTC system.

  a.. Naked short selling is the equivalent of printing counterfeit currency 
  and should be a top priority of the SEC to stop such trading action. 
  
  b.. Rules should be created and put in place so that local U.S. laws cannot 
  be skirted by simply moving illegal activity to foreign countries (brokerages 
  and exchanges). 
  
  c.. Fund short positions should be publicly disclosed by law. 
  
  d.. Holders of simultaneous short and long positions in the same equity 
  should be held to the same down-tick rule as if they were only shorting.
   
  e.. Collusion between two or more brokerages/exchanges who act to manipulate 
  share prices should be vigorously pursued and prosecuted. Today, one sells 
  to the other, and they transfer the shares back in after-hours trading. 
  Repeat the next day. 
  
  f.. Penalties for naked short selling should be severe. As it is now, it 
  is simply regarded as a cost of doing business. All profits should be 
  confiscated plus significant penalties imposed. 
  g.. Rules should be put in place so that a short sale transaction clears 
  the physical shares (pairs up) with the cash transaction. 
  
  h.. Restrict short-selling to liquid equities only, e.g. 1M daily volume 
  or higher. 
  
  i.. Ideally, shorting should be illegal all together to avoid manipulation. 
  If someone thinks a share is overvalued, let them buy a put option. 
  
  j.. Brokerages should not be allowed to loan out my shares and collect 
  money for its 'rental' while I bear the financial risk of the abuse such 
  as what is going on today. 
  
  k.. One such company of interest to me is Research Frontiers (REFR), 
  which is the victim of egregious share price manipulation, and I ask 
  that you look into this immediately to correct the situation.