From: davmiksal [davmiksal@earthlink.net]
Sent: Wednesday, December 18, 2002 3:03 PM
To: rule-comments@sec.gov
Subject: Re File No. S7-45-02

Dear Commissioners:

My name is David B. Perlman, and I write these comments solely as a
member of the investing public.

The portions of the Proposed Rule which address the specific
Congressional mandate in Section 307, e.g. the "up the ladder" reporting
within the corporation requirements, are salutory, ought not to be
controversial, and should be adopted.

However, with all due respect, the portions of the Proposed Rule which
relate to "noisy withdrawal" and communications to the Commission in the
event of issuer noncompliance are highly controversial and needlessly
jeopardize relations between lawyers, their clients, and the
Commission.  This is particularly unfortunate since there is a much
better model already in existence  -- the regulations with respect to
issuers and their auditors.  The following is a modest suggestion:

1.  The Commission could adopt a requirement that the chief legal
officer of the issuer sign all filings made by an issuer of securities
with the Commission on the same basis as the issuer's chief financial
officer and/or chief accounting officer is required to do so.  This
would also provide the name of the chief legal officer to the investing
public.

2.  When audited financial statements are filed, a copy of the auditor's
opinion letter is provided.  A similar legal opinion letter could also
be provided and filed.  That letter could even be a version of the
letter which counsel already provides to the auditors as part of the
audit process.  If appropriate, the Commission could also consider
establishing minimum requirements for the conduct of a "legal audit"
such as by specifying particular areas to be addressed, e.g. antitrust,
environmental, as well as securities law.

3.  As is the case when an issuer changes auditors, if the issuer
changes legal counsel from the lawyer or law firm who signed the
previous opinion letter, this would have to be disclosed.

4.  These proposals would work as powerful incentives for the issuer to
"do the right thing" when counsel goes "up the ladder", because
otherwise the issuer will not be able to obtain the necessary signatures
on the issuer's filings with the Commission.  The issuer would also be
discouraged from "counsel shopping" because the change in counsel would
have to be reported.  In effect, the objectives of the "noisy
withdrawal" provisions of the Proposed Rule would be satisfied WITHOUT
the need for any communication by legal counsel to the Commission in
derogation of the attorney-client privilege.  The Commission would
address any inquiries directly to the issuer.

Thank you for your kind attention.

Sincerely,

David B. Perlman