From: Harry Morton [mailto:hmorton@chartermi.net]
Sent: Saturday, June 05, 2004 9:58 AM
To: chairmanoffice@sec.gov
Subject: New rules for mutual funds.


Dear Chairman William Donaldson,

Last week, the SEC adopted some new rules on mutual funds. However, the SEC 
continues to drag its feet on the most substantial reform - empowering 
shareholders to exert a modicum of control over the companies that they own.

The proposed rule would set up a two-step process for gaining access to the 
proxy statements. First, shareholders representing one percent of company stock 
would be able call for a shareholder vote on whether they can nominate 
directors. Then, if a majority of shareholders agree, the next year the 
shareholder group would be nominate up to three directors, depending on the size 
of the board. Alternately, if at least 35 percent of shareholders withhold votes 
for one or more directors, investors would be allowed to nominate directors.

Since one of the common strains of almost all scandal-ridden companies is that 
boards of directors are not accountable to shareholders, but rather controlled 
by friends and cronies of management, it would make sense to give shareholders 
more control over the companies that they own. But because the business 
community is lobbying furiously to avoid even this small step toward shareholder 
democracy, this reform is being stalled.

This new rule is important. Shareholders should have more control over the 
companies that they own. Do not cave into corporate interests.



Respectfully,

HARRY L MORTON