October 7, 2005

Subject: File Number 265-23

Mr. Jonathan Katz, Members of the SEC Advisory Committee on Small Businesses,

Today marks simply another day in the markets where small business issuers and their investors are being damaged by the illegal trading practices set forth and allowed by the Commission responsible for regulating our markets. Trading practices that forever damage the small business enterprises and their investors.

This President, as all Presidents before him have done, identified the critical role small entrepreneurial companies play in our Nations economy. Of significant importance is that the highest levels of Job creations in our Nation come from small business issuers. The GE's, IBM's, and Microsoft's are great companies but they do not generate US Jobs like small business enterprises do. Our local communities survive off these small businesses and these communities need protection from the predators in our markets.

Over the past decade plus, the SEC has been made aware of the illegal practices of naked shorting. Concerns not only include the illegal practices of Wall Street Institutions but the indifference these Institutions have about what their actions mean to our economy and our nation. Greed drives their motivation but greed is also killing our communities. Unfortunately the SEC watched as these illegal practices grew over time and recently became exposed in a Federal Trial [US vs. Anthony Elgindy] in which the SEC appeared to utilize a practice of two wrongs do make a right, to define regulatory enforcement. The SEC sending out convicted stock manipulator Anthony Elgindy to shut down small businesses through stock manipulation practices. The SEC asking Elgindy to do their job for them all the while injuring innocent people in the crossfire. As the SEC did so, the SEC quickly generalized every small start up issuer as being "bad" and allowed the innocent to become as easily manipulated as the guilty. In the end the legitimate small business enterprises, the investors, and this country paid the penalties for the SEC quick generalizations.

My concern here is how to stop the bloodletting. I presently see the SEC as part of the problem and not part of the solution. Small Business Issuers must be provided an equal opportunity to survive and those that have preyed upon the ones that remain must pay back to society what they have stolen. Our confidence and our rights to a fair market is waning. The slap on the wrist fines do not satisfy that goal.

In what few cases we have seen brought forth by the Regulatory Agencies, the enforcement actions taken against the violators pales in comparison to the losses incurred by all. Companies are manipulated out of hundreds of millions in market capitalization while the violators receive nominal fines. In matters such as convertible Private Placement in Public Entities [PIPE's] there has been only a few enforcement actions taken but in those actions the companies never regained what they lost. The SEC disgorgements never covered the investor or issuer's business losses. By the time the enforcement was taken the issuer had lost business opportunities and suffered massive stock dilution that held them back from growth and labeled as "micro-cap" prey. The dilution forever keeping them in the markets best referred to as "The Wild West".

These penalties must be stiffer in order to cease the activities of the Industry.

At the present time the SEC is "negotiating" with the REFCO Group over their alleged manipulation of Sedona Corporation in 2000/2001. The SEC has been doing so for years while sedona and their shareholders continue to suffer. REFCO allegedly aiding in the raid of the company stock by "selling shares with unbridled levels of aggression" as referred to in a DOJ Arrest Warrant. Those shares sold, and the stock dilution encountered by Sedona, has never been recovered. Investors today continue to pay the penalties for actions taken by the Industry and inactions taken by the Regulators to maintain Sedona's right to a business model.

It is my request that for each enforcement action taken pertaining to illegal shorting and stock manipulation during such PIPE transactions, , the PIPE issuer not only be heavily fined but that the PIPE Issuer be required to buy back the shares obtained illegally, with year adjusted additional shares, and those shares be cancelled to reduce the public float back to normalcy. It must be those that committed the crime that pays the damages and not the business issuer and shareholder. Small Businesses depend on their share values and share structure to generate necessary income to grow the business into profitability. Those that risk stealing this opportunity must know that the risk comes with heavy penalties if caught.

If the SEC is serious about maintaining the integrity of these markets, and serious about the protection of our economies lifeline [small business issuers], than the SEC must set up policies that make it painful for anybody to violate the safety of these businesses futures.

Ralph Lambiase, Connecticut Director of Securities stated, " While it may be true that a number of small companies lack the financial depth to succeed, they are nonetheless entitled to succeed or fail by their own honest business decisions and not as a result of the corrupt acts of abusive short sellers." It is this Advisory Committee's responsibility - obligation - to see to it that the corrupt acts he speaks of are addressed in a manner that ceases that practice altogether.

I challenge this Committee to step up to the plate and make sure that these markets are set up in the future for the success of small business issuers. Our rights to equal protection is a Constitutional right and thus those that steal our business violate our Constitutional rights.

Thank You,

David Patch