Subject: Repost to prior investigation and request for follow up. Date: 11/12/2000 1:40 PM Sunflower Release No. 34-42037; File No. S7-24-99 RIN 3235-AH84 Short Sales. I be allowed to express some concerns. I am outraged by the behavior of the Market Makers in the OTC BB. They have demonstrated very unprofessional behavior, stole money from investors, destroyed some great small companies, and displaced many an American worker. It is far overdue that the SEC step in and make things right. Perhaps you ask how? Act immediately, many investors have been robbed and ARE CURRENTLY being robbed by the Market Makers. Effective immeidately require ALL Market Makers to make available to the SEC their long and short positions in ALL OTC BB traded stocks. Advise the Market Makers that the SEC has the power and will randomly examine their books for validity and verasity. Should a Market Maker be found to have provided misleading information (more than 5% off) STIFF FINES and PENALTIES will result. If a pattern is seen among most Market Makers the SEC will place the NASDAQ rules in place on the OTC BB Immediately. Then, examine the positions provided by the Market Makers and determine for yourself whether they have abused their privledges. Do EXTREME SHORT positions exist? If you don't want to do it accross the board take the top 100 stocks for the month of June (volume wise). Don't announce this until July 1st though. This is certainly an easy way to get a very accurate gauge of how significant the problem is. If you indeed find a significant problem (as I suspect you will), then move quickly and aggressively against the Market Makers and place the NASDAQ rules into effect on the OTC BB IMMEDIATELY! Should you do this, the Market Makers will be required to expose their thievery and will be forced to at least give back to investor's money they have taken inappropriately. Further, If you find that they have EXTREME SHORT positions require the Market Maker's to have no more than a 10% SHORT position. Now on to your questions.... 1. Yes 2. Declining 3. No 4. % Change 5. No. Let the computer tell them if they can do the trade or not. 6. Yes. 7. Not that I can think of. 8. Yes, Yes. 9. No, that's the easy way out. 10. Yes 11. Yes 12. Yes 13. Yes 14. Yes. Severe Market Maker Manipulation through EXTREME SHORTING on the OTC BB Market. It would seem you learned from the NYSE, AMEX, and NASDAQ that the regulation was not only needed but desired. Is this not also true for the OTC BB, perhaps even more so? 15. Yes. And it isn't UNUSUAL but rather BUSINESS AS USUAL by unscrupuleous Market Maker's who know they are not regulated and can do what ever they please and answer to no one. Your job should be to make the Market Maker's come clean and answer to the SEC. 16. Yes 17. Yes, but I strongly believe it has been demonstrated that the rule 10a-1 is not only needed but strongly desired by the average investor. I truly believe that Market Maker's have a vested interest in trying to get this rule abolished so they can create a playing field like they have on the OTC BB only on all exchanges, the NYSE, AMEX, and NASDAQ. God can only help us if the SEC allows them to do this! 18. No. It's too complex. Keep this as simple as possible. Come up with a simple algorithm that can easily be verified. Market Makers want very badly highly complex rules because they know then there is no way for you to monitor the rule. Make a rule that can easily be monitored! 19. Yes 20. Yes. 21. No 22. Yes 23. A COMPLETE HEDGE would Completely OFFSET the position held. 24. The greatest challenge facing the SEC today is the rampant FRAUD made against the American Investor by Market Maker's who go unregulated in the OTC BB today. The solution is to randomly spot check Market Maker's books and verify exactly what is going on. First understand the problem and it's magnitude. Then, move quickly to put protections into place that will protect the American Public. If along the way some Market Maker's go out of business closely audit them to ensure they are not practicing more FRAUD on the American Public. 25. No. Post a final price and make it available to all the after hour traders. Require them to access the site where the values are posted and to use the posted values. This will result in consistency in after hour trading. 26. Ambiguity, Uneven enforcement, and abuse of the system. 27. Greater variance in opening prices from the after hour trading locations. 28. Little to None. 29. Little to None. However, in the OTC BB market it would be greatly desired to have resolution to .001 as some stocks trade for substantially less than 1/16th. Also, I might add, it is outrageous to see a stock which the previous day had a 1 Million share trade followed by the next day when the market makers have a bid / ask of .03 x .045!!! The spread is 50% of the value of the stock. Just another example of how Market Maker's will try to drive a stock price downward. 30. Depends. If the stock is trading for .01 then yes! Some OTC BB stocks trade SubPenny. It truly depends on one's perspective and the price of the stock. 31. No. Do not eliminate rule 10a-1. Only the Market Maker's want this rule abolished and perhaps some institutions. The small investor loves this rule. 32. Yes 33. No 34. As previously stated, the biggest challenge facing the SEC today is cleaning up all the FRAUD that is going on in the unregulated trading arena- The OTC BB! The steps taken by the SEC to require listed companies to meet certain standards and provide financial information has helped tremendously in cleaning up some of the OTC BB problems. The WAMX bust was noteworthy! But..... Much WORK remains in ensuring that the Market Makers are treating the American Public fairly. One certainly must ask why are the OTC BB and the pinks the only non-10a-1 regulated trading environments in the USA? In my opinion, the rule 10a-1 should apply to ALL USA trading environments. Protection for the American Investor should apply on all platforms not just the BIG BOARDS! 35. Yes. See my position in Question 34. 36. IMMEDIATELY! This should have been done 2 years ago (I know this wasn't the answer you were looking for but it is my OPINION!). and YES, begin with the NASD Model and study / learn. Ask for opinions on modifications and see what shares out... 37. Yes 38. Yes. Again, the biggest problem you have is the OTC BB and Market Makers. 39. Yes 40. No. No. 41. YES!!! AND IT IS VERY BADLY NEEDED! MARKET MAKER'S HAVE ABUSED THE AMERICAN PUBLIC AND DONE SO OUTRAGEOUSLY WHILE THE SEC HAS STOOD ON THE SIDELINES AND WATCHED. THE TIME FOR THE SEC TO ACT HAS CAME AND WENT SEVERAL TIMES. DO SOMETHING! STAND UP FOR THE AMERICAN PUBLIC! In fairness I must admit some of the changes of late have helped and have been good. Most notably the rule that requires certain minimum standards by companies on the OTC BB. Now it is time to make the OTC BB like the NASDAQ/NYSE/AMEX so ALL AMERICAN Investors are protected! 42. Yes. Yes. 43. Yes. 44. Yes. Yes. 45. No. Until you can define how you can adequately do this my answer is NO! 46. Don't rescind rule 10a-1. Require Market Maker's to FULLY DISCLOSE their long and short positions on ALL Markets! Look where the CANCER is growing- It is in the OTC BB where no regulation exists. 47. Yes but the rule is still needed. 48. Yes. Here again, the OTC BB Market Maker's are your greatest problem today! 49. Don't rescind. Don't know... 50. Yes. Put NASD rules into place for the OTC BB IMMEDIATELY to PROTECT TODAY's Investor. Then, take your time and study but do something NOW to PROTECT the American Investor TODAY! The OTC BB Market Maker's have made fools of not only the SEC but also the American Investing Public. It is past time for the SEC to even the playing field and put rule 10a-1 in effect on ALL MARKETS! 51. Yes 52. Yes 53. Yes. I have spent more than 2 hours of my time carefully considering your questions and expressing my opinions. Please, Please, Please, PLEASE..... DO SOMETHING TO CLEAN UP THE MARKET MAKER MANIPULATION ON THE OTC BB! Sincerely and thanks for letting me voice my frustrations about a system gone amuck... Paul Louis Goding 14030 Biscayne Blvd. #904 N. Miami, FL: 33181