June 30, 1998
     
Mr. Jonathan G. Katz, Secretary
U. S. Securities and Exchange Commission
450 Fifth Street, North West
Washington, D. C. 20549
     
Subj: Comments based on proposed rule changes to Rule 504 of the Securities Act of
1933
     
Ref: (File Number: S7-14-98)
     
Dear Mr. Secretary,
     
Having heard about the proposed rule change from several individuals, business 
associates and clients, I read for myself the Release No. 33-7541; S7-14-98. 
After having read the proposed rule changes to Rule 504 of Regulation D, I 
understand the changes being sought and offer the following comments. These 
comments come the point of view of an issuer, an underwriter, a broker/dealer 
and a concerned investor.
     
Comment #1: I am in agreement with the executive summary of the proposed rule, 
in that I feel the majority of those seeking the exemptions granted under Rule 
504 are doing so with legitimate intentions. These issuers are using the 
exemptions to further expand their businesses and replace high interest debt. I 
believe the spirit and intent of the original rule was to provide the small 
business issuer with a relatively inexpensive and simple method to raise 
capital. To remove the exemptions, to eliminate it's misuse, does not address 
the problem. It is not necessary to punish the small business issuer for the 
actions of others. Enforcement rather than elimination of the rules is what is 
needed.
     
Comment #2: Perhaps there should be a rule change that requires the underwriters
and the broker/dealers to compile a due diligence package on an issuer much like
that which is required of a Market Maker under Rule 15c.2-11 of the Securities 
Exchange Act of 1934. The Commission can put the responsibility on the shoulders
of the professionals that have experience in dealing with the issues related to 
these matters and are being compensated for their services.
     
Comment #3: Over the past six years, the exemptions granted by Rule 504 of 
Regulation D have allowed for billions of dollars to be invested in small 
businesses across the nation. Given the added incentive of having a high risk 
investment be liquid on a public exchange has greatly increased the flow of 
investment to these small businesses. As the larger corporations continue to cut
work forces, and these forces cross-over and embark on new small businesses 
ventures, now more then ever, it's necessary to preserve the exemptions that 
reward investment in small businesses. Educate the investing public on ways to 
complete due diligence on investing in private and public companies.
     
In conclusion, I would like to thank the U. S. Securities and Exchange 
Commission for allowing a forum in which anyone's opinion can be heard. I 
encourage all who read this to share your comments and opinions with those who 
have the responsibilities of the care taking of our nation.
     
Respectfully submitted,
     
David W. Myott
     
President
Wathne Pierce & Associates, Inc.
Investment Banking