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Technology Stocks : Cymer (CYMI)

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To: Darryl Olson who wrote (8344)	11/5/1997 5:11:00 PM
From: Curlton Latts	Read Replies (3) of 25960

A draft of a letter to the SEC To: Division of Enforcement Complaint Center cc: Arthur Levitt - Chairman SEC Dear Sir or Madam: A large number of public investors in CYMER (NASDAQ symbol CYMI), that chat on an internet site, believe that there have been possible violations of securities laws in the trading of CYMI by certain underwriting investment banks and their clients. These violations relate to a $172.5 million convertible subordinated debt issuance by CYMI and possible misrepresentations and ommissions of material facts by the underwriters Morgan Stanley Dean Witter, Montgomery Securities and Needham pertaining to undisclosed premeditated manipulation of the common stock price of CYMI. Please investigate whether the underwriters or their convertible noteholder clients have utilized the recently issued convertible debt as a protective ceiling; carried out a premeditated plan to short vast amounts of shares of CYMI common stock and then downgraded previous "strong buy" and "buy" recommendations by their analysts to make manipulative profits (for either themselves or their note buying clients) at the expense of the public investors that they had previously advised to buy the common stock. A chronology of the events is below: May 1997: CYMI and its underwriters report their intentions to issue Subordinated Notes convertible into CYMI common stock. Morgan Stanley, Montgomery Securities and Needham have analyst recommendation reports with "strong buy" and "buy" on CYMI common stock. August 1997: Convertible notes are priced and issued. September 5: Large amounts of shares begin to be shorted in CYMI common stock in tandem with a series of "bad news" rumors that are circulated (all of these rumors have been disproven). September 15: The underwriters host an investor conference call with management designed to allay fears, deny rumors and keep public investors in the stock. The underwriters' analysts maintain their "strong buy" and "buy" recommendations. More large amounts of shares are shorted in CYMI's common stock. September 22: Montgomery analyst downgrades CYMI common recommendation to hold from buy. September 26: Morgan Stanley analyst downgrades CYMI common recommendation to neutral from strong buy. Please investigate whether the underwriters used their recommendations to lure public investors into the stock while entering into an arrangement with the convertible noteholder clients to profit from preplanned, subsequent vast short sales using the newly issued conversion price as a protective ceiling. The profits to the underwriters may be in the form of short sale gains or through non-standard abnormal fees from the convertible noteholders. Sincerely, Anybody want to send this? Change anything? Good Luck To Each And All Curly ~~~~~~^^ [6.6] .....> [_]

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