Date: 06/26/2000 12:52 PM Subject: Copy of letter sent to my conggressman Dear Committee, What follows is a copy of a letter that has been sent my congressman. In general, I believe the american investor has been robbed by the SEC/NASD lack of control over market maker shorting practices. Please do something to bring this injustice under control. June 26, 2000 Congresswoman Ellen Tauscher 1801 North California Blvd. Walnut Creek, CA 94956 Dear Congresswoman Tauscher: I am writing you this letter to request that you investigate the SEC oversight of the National Security Dealers Association and the Market Makers (MMs) of Bulletin Board (BB) Stocks as it relates to the practice of shorting and naked shorting. As a former investment banker, you know that the life blood of a small company is access to capital for creation and growth. You also know that investors who place funds in such companies expect and deserve protection from fraud and manipulation. You also know that small business is a critical building block for jobs and wealth in our economy. I have been invested in a number of BB stocks over the last several years in the hopes of building personal wealth and helping to fund ideas that have merit. One such investment is Corporate Vision Inc. of Tulsa, Oklahoma. The investors of this company have watched as MMs have steadily sold more shares than they have bought for over two years. It is calculated from NASD trading reports that the number of sales to investors now exceeds the number of buys by MMs to the tune of over 4.5 million shares. It is also interesting that each week since January 7, 2000 MM sales have outnumbered MM buys with the total difference now over a million shares in just six months. Yet, in defiance of the laws of supply and demand and favorable company press releases, the price of the stock has plummeted from over $2.50 per share to $.50 per share. The laws of supply and demand have been denied and investors deprived of fair value. Meanwhile the company valuation of its stock has been greatly reduced and with it , access to investment capital for acquisitions and growth. The MMs are supposed to provide a fair market trading mechanism, yet ,when they become invested through shorting, they actually have a vested interest in seeing the price fall. This practice must be brought under some form of control. Three MM firms seem to be leading the shorting of CVIA and one is reaching monopolistic control of BB equities, while it sets records each quarter for profits and growth. This is another issue that I would be happy to discuss with you but cannot put into writing because the true facts are shielded by the lack of mandatory disclosure on shorting. With only 13.5 million shares authorized, and what appears to be a huge short position, the MMs frequently fill CVIA orders at bid as they march the stock downwards. With a market capitalization of approximately $6.5 million, this stock is grossly undervalued. It owns a gold mine which independent assays estimate reserves to be in excess of $100 million. It owns stock of other companies that are in the process of going public. It owns a land development company that is rapidly acquiring development land. With each new press release, the MMs just continue to sell into the buying thus discouraging investors and puuting downward pressure on price. The Securities Act provides certain protective language as it relates to investors. Section 15A(b)(6) of the Securities Act says that the rules of a national securities association must be designed, among other things to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest, and perfect the mechanism of a free and open market. Section 15A(b)(11) requires that association rules be designed to produce fair and information quotations, and to prevent fictitious and misleading quotations. In spite of the intent expressed by these two sections of the Securities Act, and unlike the Nasdaq, NYSE and AMEX, MMs are not required by the SEC to disclose short positions on BB stocks. The MMs can short, even naked short, at will with no checks and balances on BB stocks. This leaves the BB listed companies prey to market manipulation on a scale only limited by the greed and imagination of the MMs. The MMs just keep selling the targeted companies stocks with the idea that they will never have to produce real shares. Their apparent goal is to force the company to fail by depriving it of working capital and discouraging investment. It is my belief billions of dollars are being stolen from investors in this manner. For the MMs, it's a wonderful business; sort of like selling insurance, but never having to pay claims. They get the money, but have no expense or expectation of delivering anything tangible in return. Yet the SEC and NASD seem to look the other way while this unfair and counter productive practice goes on. My request of you is a simple one. Demand that the MMs are held accountable by making the SEC require mandatory disclosure of MM short positions on all BB listed stocks. In this manner, excessive shorting can be made known to the investing public, monitored for excess and corrected by the SEC/NASD. Then and only then can investors in these stocks be treated with the appropriate protections against fraud and manipulation. Thank you in advance for any help you can provide in correcting this injustice. Sincerely, Marty Fischer cc: Elizabeth Owens, Director District 1 NASD NASD Ombudsman Chairman, SEC Helane Morrison, District Adm. San Francisco K. Pasternak, Pres/CEO Knight Trading Group President, Mayer & Schweitzer, Inc. President, Wein Securities