Subject: File No. S7-5-99 Author: Julia Heinzen Date: 4/6/99 11:49 AM Jonathan Katz Secretary, SEC 450 Fifth St. N.W. Washington DC 20549 RE: File s7-5-99 Dear Sir, Protective Group Securities Corp. is a small broker dealer making markets in about 30 bulletin board stocks. We are opposed to any proposal that expands Rule 15c2-11 due diligence obligations. Why should we make markets in lower volume stocks when we can't ge paid for doing that kind of due diligence, but incur additional liability? When we finance small companies through IPO's how can we expect to get additional market support if others are walking into potential liability. We feel this would be the "securities plaintiffs attorneys wealth enhancement through settlements" act of 1999. Any time a stock goes down some plaintiff attorney will get the name of a stockholder and file suit. The question of fact regarding the adequacy of the due diligence will be enough to get to trial. Even if the market maker did all it could, it would face enormous costs of trial. Again, settlement talks would revolve around settling for less then estimated trial costs, with 33-40% going to the attorney soliciting the shareholder. At a recent continuing legal education seminar on securities law, I asked a panel of experienced plaintiffs attorneys when was the last time they were involved in a case in which the plaintiff public shareholders came out significantly ahead. None volunteered a single instance. The losers will be the entrepreneurs, current shareholders, smaller companies, market makers, and the public. Winners will be the plaintiff attorneys. Ms Unger and gentlemen, this proposal is bad law. I urge it not being implemented. Sincerely, Michael Flanigan President