From: Geoffrey F. Walsh [vi@gte.net] Sent: Friday, March 07, 2003 12:36 AM To: rule-comments@sec.gov Subject: SR-DTC-2003-03 Below are my comments to this rule change based on a letter submitted 3-6-03 to the managing director, Mr. Alizzi of the DTCC. Mr. Alizzi: I saw the letter response I copied below that your press department sent to a shareholder of Jag Media Holdings regarding the bogus and unfounded rule change you have requested with the SEC attempting to block issuers of OTC securities due to "No Procedures" in place versus true legal grounds. In addition, the DTCC backdated a press release 1 week after numerous companies officially requested DTC removal to "custody only" trading based on majority shareholder vote for the removal among various issuers. Since when do you make policy changes through a low level Dow Jones reporter and then rush to later file the change to the SEC after you block company removals without legal grounds? It is appalling and sickening that you would respond about a truly corrupt lack of settlement and delivery of stock procedure in the way stated below and reference the disaster of 9-11. A lot of America including some of your workers and my friends were dramatically affected by this tragedy. However, to have your press department send out this response not addressing the potential violations of the 1934 Securities Act and lack of T+3 settlement (The 1934 Securities Act of 1933 and 1934 was passed to reduce settlement to T+3 from T+5 or longer to protect investors after the shorting abuses of the market crash of the Great Depression spearheaded by Joe Kennedy) due to the flaw attributed to naked shorting is disgraceful. Playing on the heartache that 9-11 disaster caused is absolutely sickening. I suspect there is a major breakdown between Syak and NSCC at the DTCC regarding the naked shorting scandal and that ultimately the DTCC is responsible. Lots of people and firms will exercise every ounce of their contact base to stop and reform it among the regulators. In addition, how many of your directors work for firms that are engulfed in Wall Street Scandal from the O'Quinn suits to IPO spinning to the Spitzer investigations? To position your response as though the DTC has done nothing wrong and utilize terroism as a crutch is horrific. There is terroism going on right in your own camp potentially due to offshore naked short selling and the potential violations of the Securities Act of 1934 pertaining to delivery and settlement of trades. This is why the FBI had the Bermuda Short scandal, the arrest of Mark Valentine, former Chairman of now bankrupt Thomson Kernaghan, the indictments of Paul Lemmon, the open investigations by the SEC, FBI and IDA in Canada and US, the Rhino Advisors short selling manipulative practices settlement, and the attempted withdrawl of 62 firms from your monopolistic system. I have no problem with national clearance as long as it is not above the law and forces settlement of trades within the prescribed time frames. Small companies are being diluted in an unlimited counterfeit type manner to the dismay and surprise of management and shareholders of these organizations due to naked short selling. If you have a flaw then fix it and force settlements or buy-ins. Allowing "failures to receive and deliver" among back offices at brokerage firms all over the street is inexcusable and the loopholes must be closed. In the interim, allow these small companies to withdraw if it is there only chance to combat the situation short-term. If you handle trillions of dollars, why would you care unless the DTCC is at the heart of the problem? I have been a long-term Republican fund raiser and past and future congressional and/or senatorial candidate. I promise you if you do nothing about it, Washington will from the White House (next cc: to Karl Rove) down to the regulators or state wide Attorney General offices. Your response from the DTCC is abhorent and I will be sure to forward it to all major news organizations and the SEC. We are all over worked and under paid so that is no excuse for a potential breakdown in the system. In an era of corporate accountability, I highly suggest the system be corrected if there are flaws, or the DTCC could potentially be accountable too. Would Microsoft or IBM be what they are today if financial terroists destroyed their companies in their early stages through unlimited manipulative trading and naked short selling? What if one of these small OTC companies had a potential cure for cancer? Don't small companies deserve the same protection rights as large financial institutions? To reiterate what you probably know, 80% of the US GNP is generated from small businesses with under $10 million in annual revenue per the US Chamber of Commerce. The small business is the heart of our American economy; therefore, every effort should be afforded to protect their existence from abuses in the US financial system. Sincerely, Geoffrey F. Walsh CEO Solution Capital DTCC letter response to major Jag Media Holdings, Inc. shareholder: I wish you would spend a little more time talking to marketplace professionals and reading about how the capital markets operate in the U.S., so your free speech rights would be carried out more responsibly. Market professionals would tell you that short selling is a function of the market that has existed for years.....and it would occur whether securities are held at the depository or in physical form. As such, the concerns about short selling really have nothing to do with DTCC. Our customers can not complete settlement having a short position. As to the various aspirtions and accusations you've made about DTCC, let me point out that when the safety and certainty of our nation's financial system was threatened on 9/11........hundreds of DTCC employees stayed round the clock in our offices close to ground zero inspite of the loss of family, friends and colleagues at the World Trade Center to ensure that $280 billion in marketplace transactions were settled that day (and $1.8 trillion settled that week) even while the marketplaces were closed. DTCC has never shirked its responsibilities to ensure the safety and soundness of the U.S. financial system....and for that you, as a concerned investor, should be thankful. I won't comment on the various concerns about short selling, except to suggest to you that you're focused in the wrong direction and fixated on the wrong organization. kind regards.