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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today -- Ignore unavailable to you. Want to Upgrade?

To: Bill Brogan who wrote (16274)	5/12/1999 10:00:00 AM
From: Ken Salaets	Respond to of 19331

Bill, it's important to keep in mind possible motives behind the referenced web site. While the views expressed there may well be valid, I suspect that they may be colored to some extent by concerns that, by increasing accountability, the *proposed* rule changes may make it more difficult for certain brokerages, investors, etc., to continue to play in what has heretofore been a lucrative marketplace. I appreciate the fact that DCI management is asserting itself by preparing and distributing materials that will facilitate compliance with Rule 15c2-11. Smart move. Just my 2 cents. Ken

To: Bill Brogan who wrote (16274)	5/16/1999 11:07:00 PM
From: Bill Brogan	Respond to of 19331

All-- There was an interesting article today in my hometown newspaper, the Denver Rocky Mountain News, entitled "SEC chief a believer in disclosure" by a David McNaughton from Cox News Service. This article seems extremely cogent at this point in our company's history since it seems to explain, through a question and answer type interview with the SEC Chairman, Arthur Levitt, why the SEC may have swung the heavy hand two weeks ago. It starts out talking about more disclosure requirements for mutual fund companies but quickly gets into use of the Internet for investing. When asked about chat rooms and whether they should fall under investment advisory regulations, Mr. Levitt responded "I think as long as people know that chat rooms can be unreliable, and as long as we are prepared to go after people who make fraudulent use of chat rooms, by being paid to promote certain securities--as long as we can go after that kind of miscreant, I think our role is to educate people as to the dangers of believing everything they hear in (them)." Perhaps it is this new era of investing that has the SEC clamoring to make examples of companies and people who are heavily involved with "Internet-style" investing. He then goes on to talk about the SEC's priorities: "I would say seeing to it that the numbers available to investors are as comprehensive and accurate as possible, consistent with our mandate of full disclosure. That means America's accounting must keep pace with our markets and our financial system. So seeing to it that our numbers are accurate and reliable, stamping out accounting fraud, coming down hard on those companies that abuse the system by trying to make numbers that will satisfy short-term-oriented analysts, is a major target of this commission." Also, "Seeing to it there's no compromise in the...protections investors have in U.S. markets in terms of the new formulation of international accounting standards" and "Strengthening the role of the audit committee, a protection for the public investor..." He also states "We also have a whole mechanism of enforcement and surveillance. ...I'm interested in one level, and that's investor protection." It's become clear to me in the last few days that probably the only reason the SEC has taken a look at DCI recently is because of a certain disgruntled employee/shareholder who wants to exact some sort of bitter revenge. But regardless how they happened on DCI's minor accounting "twist" the implication remains that according to Mr. Levitt's comments they will be cracking down hard on companies who overstate assets to look good in the short term, either legitimately because of the pooled asset method of accounting or illegitimately because of true concerns with a company's future. I think a two-week trading suspension for the seemingly minor restatement DCI had to make was clearly a punishment far in excess of the "crime". If the pooling of assets method is still a legitimate (albeit dying) way to account for mergers and DCI accurately reported numbers using this method, why couldn't the SEC just ask DCI to restate the numbers using the other method? If they really thought there was an accuracy problem, wouldn't they have asked DCI to generate accurate numbers using the pooling of assets method then if they were so concerned about this method ask for a restatement using the purchase method? Seems like they really didn't find any wrongdoing or malicious intentions, they just wanted to the company to use the purchase method! And that justifies punishment to all current shareholders via a trading suspension?! They're either using us as an example or they're on a witch hunt guided by the misguided tips of our disgruntled employee... Done venting now. --Bill