From: Jeffrey Bennett [newtech@interserv.com]
Sent: Thursday, January 01, 2004 8:10 AM
To: rule-comments@sec.gov
Cc: Senator Richard Lugar
Subject: S7-23-03:

 
To Whom It May Concern:
 
I have read some of the comments from concerned investors that have been posted 
on various websites, and I have come to the conclusion that there probably isn't 
a lot that I can say that would address the technical concerns that investors 
such as myself now seek correction by the SEC.
 
I suppose my plea to you would be to look at the "Big Picture".
 
I admit readily that there is a great deal that I don't know about investing, and 
more specifically about the rules and regulations. I also know that this topic has 
become a battleground. I believe my information is correct, and I further believe 
that my bulletin board stock investments have been severely compromised by a 
continuing violation of the "spirit" of the small cap market.
 
I have owned a significant number of shares of Nanopierce Technologies for almost 
four (4) years. I also hold a lesser number of shares of Jag Media, but, only for 
a little over a year. I believe, based upon the information that I have read, that 
both of these companies have been victims of "naked shorting", and their situations 
have been made much worse because of the "death spiral financing" agreements that 
were made with them.
 
I didn't consider Nanopierce to be a speculative investment at the time I originally 
began purchasing shares; and, I still have a great interest in its proprietary 
technology. Jag Media, on the other hand, was a bit of a speculative investment 
on my part. At the time of my investment, I had a strong belief that Jag's share 
price would improve greatly after the company removed itself from the DTC. I have 
not sold a single share of either of these holdings.
 
I'm not a day trader, nor do I consider myself to be a "trader" at all. What I 
consider myself to be is more of an investor. I fully understand that investments 
in OTCBB stocks bears a certain amount of risk. However, at the time of my investment 
in both of these companies, I believed in the "system". I really thought that each 
of these companies had a legitimate chance to succeed.
 
Now, however, I have a much different view of the system. I no longer believe that 
system looks out for the small investor. Maybe that's the way the system is supposed 
to work. In any case, I feel like I made a mistake investing in OTCBB stocks because 
I don't feel that the rules and regulations are being enforced consistently. Maybe 
it is because there is too much to do, and too few SEC personnel to police the 
system. Or, perhaps the system has gotten out of control, and there is no way the 
problem can be corrected without exposing too many people and too many companies 
of wrong-doing. I could jump on the victim bandwagon; but, I made the choice to 
invest my resources in companies that I believed would succeed. If only I had 
known more about the system.
 
I believe the Depository Trust Corporation is complicit in naked shorting debacle. 
Of all of the events that I have witnessed over the last few years, the refusal of 
the DTC to allow Jag Media to exit the system is the most disheartening. As a 
shareholder of Jag, I authorized the company to exit the DTC, as did an overwhelming 
number of other shareholders. Taking a simple view of this approach, I consider this 
to be all of the authority needed by Jag (and the DTC) to allow for removal of the 
company from their system. One must ask themselves why Jag was prohibited from such 
action. I choose to believe that such an action would have exposed the failings of 
the DTC. I believe that there is a massive naked short position in this stock. But, 
maybe we will never know.
 
I should probably voice my opinion regarding "naked shorting" in general, and about 
"death spiral financing" in particular. But, I don't know what more I might add of 
value. I can tell you that I do understand that there is a responsibility on both 
sides of the table to do what is right... "death spiral financing" is most likely 
a financing option of last resort by most small companies; but, sometimes it is the 
only option to keep the doors open until success is achieved. If it is really an 
option doomed to failure, why is it even allowed by the regulating agencies. If, 
indeed, it is a viable option, why is it not further policed? If convertible 
financing such as this is a legitimate source of funding for companies in most cases, 
then I believe the regulating agencies should relentlessly pursue those financial 
companies who offer this financing option as a way of grossly enriching themselves 
while manipulating the OTCBB companies into the ground... and in the process, causing 
great financial loss upon the shareholders of those companies. I have guarded optimism 
that O'Quinn's pursuit of justice for small investors like myself will be successful.
 
In summary, I suppose I should simply express my lack of confidence in the system in 
general. Until someone can explain to me in clear terms why Jag was not allowed 
removal from the DTC, and until someone can explain to me in clear terms why "naked 
shorting" is not policed as a higher priority by the SEC, then I don't feel very 
compelled to invest in the "system". (And by that reference, I point to not only 
OTCBB stocks, but also NASDAQ and NYSE listed stocks.) There are too many fringe 
investors and manipulators testing the boundaries of the system. I am inclined to 
invest my resources in tangible assets that are much more within my control. I hope 
my opinion changes.... but, it won't change until something is done to restore my 
confidence in the system. My broker is a trusted resource to me; but, he really can't 
do much other than buy and sell stocks for me. It is a sad statement that he can't 
really provide information that proves my concerns to be invalid.
 
Thank you for taking the time to listen to my concerns.
 
Sincerely,
 
Jeffrey R. Bennett