Subject: File No. SR-NASD-2005-112
From: David Patch

November 17, 2005


While the effort here by the NASD must be commended the effort has once again fallen short of eliminating any and all abusive patterns of business.

Reporting short interests in a stock is necessary for every evaluation of a securities value. P/E Ratios must be derived from an understanding of exactly how much supply is actually in the system as it affects the overall valuation of a security. Hence all reported short positions, including exempted shorts, must be properly disclosed to the investing public. Reporting exempted shorts does not violate any proprietary rights of the investing members but only paints a true picture of exactly how a security is being traded.

Today there is much speculation about how Market Makers operate in this marketplace and whether they are conducting bona-fide market making practices or mere strategic market trading. The NASD and other regulatory agencies have a very difficult time evaluating such conditions and thus err on the side of the Market Makers. That philosophy in itself puts the interests of the Market Maker above the interest of the investing public. The NASD needs to have a clearer direction including the creation of a deterrent to fraud.

To truely make these markets transparent, everybody must be trading off similar information. That includes the members of the industry we hold critical to insuring a safe market. So far these members repeatedly let us down as greed comes before ethics in their game book.

I applaud the efforts the NASD is undertaking to report short positions in the OTC markets but would suggest that these loopholes, exemptions, be removed and that all short positions are equally disseminated to the investing public. If Companies must report Insider Activities for the betterment of public disclosure so shall the industry who is provided exemptions over practices the public is expected to operate to.

Dave Patch