Mr. Jonathan Katz


Securities and Exchange Commission

450 5th Street, NW

Washington D.C., 20549

Dear Mr. Katz,

This letter is in response to the recent ATS proposal being considered by your office. We believe that the implementation of this rule would have the direct opposite effect of its intended purpose. As professional money managers become responsible for managing larger amounts of the investing public’s money, it is glaringly evident that we need flexibility in executing certain trading strategies. This involves having access to systems which allow us to move larger quantities of stock in an anonymous fashion without drastically influencing the price of those securities.

By establishing a rule that forces every order to reflect in the public quote stream, you are effectively taking away this ability to implement what professional money managers may see as their best method of execution. Result - poorer investment performance for our customers who are individual and corporate clients alike. There is no doubting the benefit of an upstairs market facility when trying to move in and out of certain securities, especially in the less liquid small cap markets. Also, by tipping our hand, day traders will quickly front run us, thereby diminishing legitimate liquidity and increasing unnecessary volatility. Overtime the result may be an inability of investment firms to invest in less liquid small cap issues leaving these stocks to be nothing more than trading vehicles. The result of this could severely damage the ability of start up firms to access the capital markets. Without access to institutional investors, some firms with excellent prospects may be faced with an insurmountable obstacle to growth.

It is our strong opinion here at Caldwell and Orkin that forcing this proposal will undermine the ability of fiduciaries to provide their customers with the best execution. We urge you to take more time looking into the serious repercussions this could have not only on the industry participants but the investing public themselves.

Sincerely, Sincerely,
>Russell Rhoads Michael B. Orkin
Director of Equity Trading Chairman and CEO