Subject: File No. S7-02-04
From: Richard W Treharne, IV

February 25, 2004

I believe it is completely wrong to allow shorts on Penny Stocks. It is a totally different mind set when you are dealing with them. Slight changes in the price produce large percentage changes. If it is seen in the volume that it looks like dumping is happing then people panic. This panic causes others to panic and we end up with large down drafts of the pps. IF someone owns a penny stock, then it should not be allowed that someone else should borrow it and sell it on the market. This creates a false market and makes others believe that those who actually own the penny stock think it is time to sell. It should not be allowed and MMs definitly should not be profiting by allowing the price to decrease since they are the ones who are in the most control of these sub dollar stocks. I am firmly against allowing shorts to be performed on these penny stocks and so should any other investor wanting to go long on a stock.