SmartDisk Corporation
3506 Mercantile Avenue
Naples, Florida 34104

November 27, 1999

Jonathan G. Katz, Secretary
U. S. Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, D.C. 20549-0609

Re: File No. S7-22-99

Ladies and Gentlemen:

This letter is being written with respect to the Commission's Proposal to Implement the Blue Ribbon Committee's Recommendations Regarding Audit Committee Effectiveness dated October 6, 1999.

In particular, I wish to comment on the Commission's proposal to require Audit Committee members to report in proxy statements whether anything came to their attention that would lead them to believe that there are any untrue statements or omissions of material fact in the financial statements or alternatively to require Audit Committees to disclose whether any "material modification" should have been made to the financial statements.

Either of these conditions, if adopted, will add significant liability exposure to Audit Committee members, by further increasing their responsibilities to investigate, audit and certify the financial statements and any statements or disclosures included therein. It is my belief that most Audit Committee members have neither the staff nor access to the information required to perform these added responsibilities. Because of this, Audit Committee members will be placing themselves in a situation where they cannot effectively fulfill the obligations imposed by the added requirements and will therefore subject themselves to increased liability. This added liability placed on Audit

Committee members will undoubtedly have a negative impact and make it virtually impossible to recruit Board members to serve on the Audit Committee.

As a result, I respectfully suggest that both provisions requiring Audit Committee reports and proxy statements be stricken from the SEC proposal.

Sincerely,

Michael R. Mattingly