Subject: File No. S7-25-99
From: Raymond H. Gambel
Affiliation: Retired

February 17, 2005

The following quote from public comments is, or purports to be, a quote from Eliss B. Walter of the NASD.

It would be unfortunate if the proposed interpatation were used as the basis for an argument to deprive brokerage customers of the high level of protection to which they are accustomed.

Excuse me?

Does this protection include NASDs failing to police spreads for god knows how long resulting in millions of dollars of fines to the NASD itself? And that passing over in silence the millions upon millions, perhaps billions and billions of dollars in losses which NASDs protection was supposed to detect and deter. It did neither.

Does this protection include the benign neglect of the analysts scandal wherein analysts recommendations, labeled POS, were enthusiasticly presented to the public as one extraordinary Buy opportunity after another? Through this slight of hand by generally big members, the few firms could get big underwriting fees for subsequent issuer deals and the analysts could get his children into exclusive private schools. The public and the great untitled broker-dealers and their employees were punished for their purity. That is something to ponder the next time you are greeted at Walmart by a golden ager back out of retirement.

Does this protection include the oversight that allowed funds to direct brokerage to firms that sold a lot of the funds offerings in apparent violation of long-standing if not enthusiastically enforced rules and nominal policies of the NASD. It must have been difficult for the firms to hide such large trades and such large commission income for the ever diligent but always deluded NASD Management.
What did the firms do to defeat the protection of which Ms. Walter boasts. And , of course, with such myopic oversight we will never know the true extent of the damage done to investors on NASDs watch to use a spectacularily inappropriate word.

Does this include the same oversight that allowed impostors to take license exams for pending representatives with either the lack of ability to pass the exam or the lack of interest to try to pass?

The time has come for the NASD and the SEC to decide if they want to run with the foxes or run with the hounds. It is clearly beyond the power of either organization to be an advocate for truth, for honesty, and for clarity to say nothing of being The Investors Advocatewhile they are simultaneously working hand in pocket with some issuers, SROs and a few broker-dealers to undermine a fair capital market.

Raymond Gambel

Season with quotation marks where appropriate and parentheses as the software seems to reject them.