From: William Fleener
Reference to File No. 4-500. Request for rulemaking regarding member records of "short" positions and reporting and public dissemination of aggregate positions by security.
There is a crisis facing the OTC market today in the lack of short sale position reporting and disclosure of OTC issues. This lack of transparency regarding short selling in the OTC market allows fraudulent acts to go undiscovered and manipulative short sellers to hide. An example of this manipulation can be noted in the Silverado Gold Mines Ltd. stock "SLGLF" that sells for .05 cents or less.
Being ranked as one of the top ten gold mines, Silverado's stock has continually been suppressed via naked shorting by the market makers. On September 15, 2005 the Wallstreet Reporter interviewed Silverado's Chairman, President, and CEO Garry Anselmo who said, "As of January 21, 2003, we've been hit very heavy with naked shorting. Professional traders hit out market with 57 million shares in three days, which knocked our price down significantly and they've kept it down here for this last two years, it's at a nickel. It betrays the real value of our gold in the ground and the fuel that we're so close to bringing on stream, which are quite significant projects and really can advance this company quickly and affect its price quickly. But until the price begins to climb again these values do not show and I think people become confused by such market activity."
Please give this situation immediate attention by amending the NASD Rule 3360 and require NASD Broker dealers to maintain a record of total "short" positions in all customer and proprietary firm accounts in all publicly traded equity securities as well as report this information to the NASD for public dissemination of the short positions by security. The SEC's action is urgently needed to prevent fraudulent acts, expose market manipulation, promote fair principles of trade and protect investors.