Jun. 14, 2023
I would like to thank you for taking the time to read this message. My name is Marlon and I am passionate about ending SEC Rule 15c2-11. There are many issues with this rule that need to be addressed and this email is long overdue. This rule discourages competition in the stock market, violates antitrust laws, violates human rights, destroys liquidity in the market, and is unconstitutional. I will do my best to convey these points throughout this message. SEC Rule 15c2-11 creates an unfair market where market makers are unable to compete for shares. Since expert market stocks are not sponsored by a market maker, it makes it difficult to find a healthy entry and exit point when executing a trade. It is unfair to retail when dealing with expert market stocks as 15c2-11 drives demand down. Also, we are not able to make profits and have to wait for disclosures unless we live in a different country. While our market is offshored to foreigners, they are able to drive demand before any American can place a trade. By the time a stock provides disclosures, it is too late to make a substantial profit for Americans. This lack of competition leads to less efficient markets, limited choices for retail, and a weak asking price. This hinders innovation and allows for large firms to purchase at a lower price than what would be offered if 15c2-11 was removed. Retail does not benefit from this transaction. Antitrust laws, such as the Sherman Act and the Clayton Act, are designed to promote fair competition and prevent anti-competitive behavior in the marketplace. I believe that 15c2-11 is a direct violation of these acts. As a result of this rule, market makers are able to manipulate the market with no competition. Although it is hard to argue that this is a human rights violation, there are still aspects to 15c2-11 that go against our rights as Americans to choose what we invest in. 15c2-11 is a direct violation of the right to work. American citizens should have the complete freedom to pick and choose what companies we want to invest in. We should also have the right to economic opportunity regardless if a company has provided disclosures or not. 15c2-11 is also a violation of our right to own property. Liquidity has been a huge issue in the stock market, specifically in the OTC market. Delay of information places a burden on OTC stocks that are custodianships/reverse mergers. These stocks are unable to find a market maker, thus removing liquidity from the market. There is no incentive to invest in these stocks when there is no demand from retail since we are kept away from these investments. Trading volume has been atrocious and as a result, there is no real way of measuring what the bid/ask spread should be set at. As a result, 15c2-11 makes the OTC market look less appealing, driving volume away from the market. Finally, 15c2-11 is a direct violation of the constitution and has no real standing in law. This rule restricts the freedom of speech (First Amendment) by placing restraint on reverse merger companies who are too new to provide disclosures. These companies are unable to present their investment to the general public and are silenced by regulation. The Fifth Amendment of the U.S. Constitution includes the Due Process Clause, which provides that no person shall be deprived of life, liberty, or property without due process of law. 15c2-11 deprives retail investors from life (the right to provide a means of taking care of day to day activities), liberty (the freedom to pick and choose any company to invest in), and property (shares of a company). This rule strips due process from retail and allows the SEC to make any rules they see fit (illegally, of course). The Tenth Amendment is stripped away from its power when SEC enforces rules without the consent of the people. The rule exceeds the regulatory authority granted to the federal government and encroaches upon the rights and powers of the states. I would like to once again thank you for taking the time to read this message. I hope that it persuades most, if not all, to go against this rule and stand up for retail. I believe that the market was much stronger before this rule came into play. This rule is unfair to retail and a direct insult to the American people. It does not make sense that foreigners can invest in our market while American retail has to sit on the sidelines until the last minute. Please consider the hearts and wills of the people you represent. We are here to build with each other and I hope we can see that day come. It is a dream of mine to invest in others and build legacies. Sincerely, Marlon Melson Jr.