Date:    06/21/2000  11:41 AM

Subject: Manipulation
 
I have been in the securities business for over thirty years. What I have to say
reflects my opinion only, and not that of Southwest Financial Services, 
affiliates, Southwest Securities, or officers and directors of same. Some years 
ago, I subscribed to a service specializing in OTC stocks, and was told that 
they knew of at least thirty companies that had been forced into bankruptcy 
because of continuous market maker naked shorting. There were numerous stories 
of stocks where shorting in excess of the float occurred. I was told that the 
thirty companies to which I refer were legitimate enterprises, and repeated 
complaints to the NASD and SEC were ignored. To me, this is a national disgrace,
and I remember someone saying to me that he could only conclude, because of the 
impunity with which thes market makers were acting, that the regulators were 
looking the other way. (I am not making this allegation.) I find it hard to 
believe that these market makers are allowed to naked short these stocks. 
Additionally, I don't know a single person with whom I have spoken about it who 
doesn't believe collusion is alive and well. The effect of this is to shut the 
door to financing so needed by many small companies, not to mention the enormous
losses suffered by investors who saw reason to invest in these companies. The 
bulletin board is even worse, and i have heard of trades made below the bid and 
above the offer, only to see the stock go right back to where it was. Apparently
they continuously report trades out of sequence and withold reporting a trade 
when to their advantage. As to  the naked shorting, I've heard that clearing 
house fraud is rife, with trades cancelled, that delivery fails are covered up, 
etc. I have heard that organized crime is putting up capital in exchange for 
some guaranteed return. I don't pretend to know if any of this is true, but I 
have witnessed trading in stocks that defies belief, and I have no doubt 
whatsoever that something stinks in the kitchen. I believe markets should 
function to accommodate supply and demand, not to allow these market makers to 
hurt companies by what in effect is a perpetual stock offering. I know a lot of 
bitter people whose complaints were ignored. I have never once knowingly 
misrepresented anything to clients, but to me the markets are misrepresenting 
their true function by allowing this to go on. Thank you for your attention, 
Bob Garrett