Subject: File No. S7-06-04
From: Andrew H. Dral
Affiliation: Investment Officer

October 12, 2004

Mr. Jonathon G. Katz,

I believe mutual funds should be penalized for market timing funds. The 2 percent redemption is a meaningful deterrent against future market timing abuses, because it negatively influences fund performance. Poor fund performance means investors will not invest in the fund, which is the proper result. Please, stick with the mandatory fee.

In addition to the fee, you might have the firm make whole the accounts of the investors harmed in the fund by the amount of the penalty, also paid by the fund company. Thus, the fine for the fund company is 4 percent, 2 percent to the SEC and 2 percent to the investors harmed.

Even better, fine the principals of the fund: PM, CIO, and mutual fund board members. These folks should be hit directly with criminal fines for damages, especially if the prospectus has wording prohibiting market timing in the fund, give a portion of the fine to the investors harmed.


Andy Dral
1500 4th Street #25
Sacramento, CA 95814