Subject: File No. S7-02-04
From: John T. Berg, Ph.D.

February 14, 2004

Part 1 I just wish to point out that there are quite a few pink sheet stocks that trade in billions of shares/day. While reading your description of penny stocks I noticed that there was frequent mention that penny stocks are thinly traded. That is not true. I own half a dozen penny stocks and each typically trades millions or billions of shares/day.
Part 2 I often watch stock transactions during the day on my penny stocks QBID, PRIM, LBTT, IDTA, CMKM and notice that there are frequently periods of time when all trades will be at the ask and the price of the stock drops. According to the laws of supply and demand, the price should rise with constant buying. This happens all the time and makes be suspect that market makers are manipulating the price for their own purposes.