From: jcline03@comcast.net [mailto:jcline03@comcast.net]
Sent: Thursday, February 19, 2004 10:48 AM
To: Terry.Reicher@nasd.com; Robert.Glauber@nasd.com; president@whitehouse.gov; Pat Clem; 
Nazaretha@sec.gov; heinej@sec.gov; enforcement@sec.gov; eliot.spitzer@oag.state.ny.us; 
donaldsonw@sec.gov; cutlers@sec.gov; chairmanoffice@sec.gov; AskDOJ@usdoj.gov; 
RStaples@DFI.WA.GOV
Subject: NASD Ruling Delay


To Regulators and Enforcers,

I am voicing my discontent about a recent extension to a rule change in the Securities 
Market.  I'm a small investor of penny stocks here in the State of Washington.  I feel 
these stocks have been shorted by brokers, dealers and marketmakers via naked short 
selling ( the sale of counterfeit stock ). I believe the neglect by the regulatory 
agencies ( SEC, NASD and other SRO's) to ensure investor protection in the US continues 
unabated. 

The NASD recently proposed a much needed change to the "affirmative determination rule" 
for short selling. It was to become effective 2/20/04. This rule closed an abusive loop 
hole by non NASD members who sell stock short without delivery, what's been called "naked 
shorting". 

On 2/18/04, the NASD announced an extension of the effective date till 4/1/04, citing 
technological changes required by member firms to implement. The fact is this is a simple 
rule modification that prevents non member firms (i.e. Canadian and offshore brokerage 
firms) from claiming a Market Maker exemption. The members already have the technical 
network to do legitimate trades. This has the appearance, to many investors, as just 
another excuse to allow the continuation of trade settlement failure.

This problem was identified as an abuse in 2001 by the NASD and similarly by the SEC as 
early as 1999. The SEC is formerly proposing REG SHO to similarly restrict abusive short 
selling. Rule SHO is 5 years in the making, with two public comment periods still 
pending. 

This extension, is yet another example of regulatory bodies protecting and shielding 
their members from financial harm at the expense of investors. There is no excuse, there 
is no burdensome requirements in this rule change. It merely imposes normal delivery 
determination by non member sellers. 

I am tired of the abuses in the financial markets. The SEC and other SRO's have been 
shown they are inept at their mandates. The issue of "naked shorting" is in my opinion 
the biggest crime perpetuated on the American public and accounts for trillions in losses 
by virtue of counterfeit capital stock. 

What will each Sate Attorney General need to do to correct broker fraud in each state?  
What is the State of Washington doing with regard to these issues? It is my opinion that 
if we alienate investors from our capital markets, and continue to erode the trust of the 
investing community, we will be faced with nothing but economic disaster. 

Judy Cline
7214 193rd St. E.
Spanaway, Washington 98387
253-847-8338