A civic minded citizen.
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Subject: File # S7-5-99
Author: "Michael Zapara" <zee@gte.net> at Internet
Date: 4/7/99 12:07 PM
Date: 4/6/99 2:20 PM
Subject: File No. S7-5-99
I am opposed to the proposed amendment to Rule 15c-211 by the SEC. Please
contact them and tell then this is not in the best interest of small business in
California
I believe that the SEC is well-intentioned in its efforts to combat
microcap fraud, but fails to recognize the impractical and onerous burden
this amendment would place on legitimate market makers. Under these
amendments, the responsibility of regulating and policing small company
issuers, whether reporting or non-reporting, would effectively shift from
the SEC to the market makers who trade in these stocks.
Market makers who choose to continue trading these issues would either risk
unlimited liability for the accuracy and truthfulness of financial
information over which they have no control, or have to undertake the
significant additional costs related to effective due diligence on each
and every issue for which they make a market. Still, they would leave
themselves open to crushing lawsuits from plaintiffs' attorneys and
disgruntled investors anytime a stock turns down.
No legitimate market maker is going to accept that responsibility. Instead,
if this rule is implemented, legitimate market makers cease to quote OTC
Bulletin Board and "Pink Sheets" stocks.
The end result means no liquidity for small company stocks and,
consequently, a loss in price transparency, bigger spreads, a drop in stock
prices -- and less protection from fraud for microcap investors!
In fact, according to respected Business Week investment commentator Gary
Weiss, this rule would play right into the hands of scam artists who
manipulate stock prices, since they would dominate the microcap market once
legitimate traders pulled out.
In short, these proposed amendments would irreparably damage both the
markets and the companies whose securities are traded in these markets and all
investors how have invested in these companies
Please see that this Amendment is not passed.
Thank you
Michael Zapara
42450 Bob Hope Dr.,
#225Rancho Mirage, CA 92270Fax 760.340.6629Zee@GTE.NET
sec.gov |
