Subject: File No. S7-30-04
From: David Patch

September 10, 2004


It is clear by all the comments already presented, as well as the statements made by Mr. Greenspan and Congress that many are not sure what it is you are trying to resolve. Hedge funds have, in some cases, violated the rules of fair market practices. So have Mutual Funds and Industry Banking. Would Registration fix any of this?

I think that the SEC is fully aware of actions already being undertaken by some unscrupulous hedge funds but use this as a rouse to the issue at hand. Why not simply fire directly at the problem instead?

Hedge Funds add liquidity to the markets. That may be good although excess liquidity can also be damaging.

Hedge Funds operate off a scheme of short selling but are provided exemptions from having to make delivery on the short sale. Why not simply address the exemption? Hedge funds should have no exemption in shorting and must make delivery of their long position as the borrowed share for settlement. If a hedge fund has already provided that share to another for loaning they have no rights to short against it without borrowing from another. Paramount to this is that all trades get settled as defined by the Securities Act of 1934.

In Elementary school our teachers told us to look for the simply answers first before we attacked every issue as a major one if we are to pass the test on time. The SEC appears to have started by assuming it was a difficult problem and have now surpassed the time limit to pass the test.

Go back to the basics and attack the root and stop playing with the unimportant. Correct the Hedge Fund abuses by enforcement and reforms against the specific abuses. The abuses you are aware of will not be corrected by registration it will be by tightening up how liquidity is made in the marketplace.

As a good friend told me THIS AINT ROCKET SCIENCE

BTWRegarding Phillip Goldsteins letter referencing Bumpty Dumpty, I think I talked to that person at the SEC as well but when I talked to him he said he worked for the Division of Market Regulation. Bumpty kept telling me that it was not that easy and that it was a COMPLICATED Issue. Funny how everything of corrective measures at 450 5th Street in Washington is complicated but Investors keep getting abused while the tenants play with the remedies.

Jack Welch had a phrase in his book Finding a Better Way Everyday He didnt say every decade. Stop stalling and address the issue you are trying to and do it swiftly.