Author: at Internet Date: 12/16/1999 1:40 PM Subject: Short Sales - File No. S7-24-99 December 16, 1999 SEC Washinbgton, DC RE: File No. S7-24-99 (Short Sales) I have been trading stocks for many years and wanted to inform the SEC what a great job they are now doing in cleaning-up the mess that has existed for years with trading stock in the small companies, ie: OTC-BB stocks. I can remember about two years ago, when my wife and I invested in an up and coming company called Systems of Excellence, with their super fast micro-processing chip. The owner, I think was a guy named Hutto, who went to jail for stock manipulation, and my wife and I lost $ 17,000.00. I know OTC-BB companies are risky investments, but the largest return can exist in helping a small sound company grow into a large company. Intel and Microsoft were once OTC-BB comapnies. I still invest in small companies, but only ones who now are fully reporting their financials to the SEC. That is a great rule you passed. The next thing that needs to be cleaned-up is the pure, and legal, stock manipulation that goes on everyday with the market-makers, who control the trading of these small companies. My broker requires me to have the full amount of funds in his account before I can "short a stock", ie: sell a stock I do not own. Plus, my broker will not accept a short sale on bulletin board stocks, even if I have the full funds in his account. Then, can you tell me why the SEC allows the market-makers to short sell these OTC-BB stocks with no funds invested ( I think it is called naked shorting or ghost sales). If I am not allowed to sell short an OTC-BB stock, even if I have the funds, then why are they allowed to do it everyday with no funds at risk. Is this not a tool for stock manipulation? I would love to be able to sell shares in a company with no funds at risk, and then buy the shares back after I drove the price down, again with no funds at risk, ie: closing out my short sale. Why not require the market makers to play by the same rules we, the little investor, have to play by. This then allows the stock of the company to stand on it's own merit and not be manipulated. Again, you guys are doing a great job, you wouldn't believe how wonderful it is to see that someone if finally out to help the little guy. I stayed out of stock investing after the Systems of Excellence loss, and only came back-in when I learned you were now requiring all OTC-BB companies to be fully reporting, if they wanted to stay on the OTC exchange. Keep up the great work. Sincerely, J. Edwards Arizona