Date:    06/21/2000  3:42 PM

Subject: New chnages -- rule S7-24-99

     
I would like to add my own comments and experiences with Market Makers naked 
shorting of OTC-BB stocks. This activity is widely regarded by the OTCBB 
investing community as the last vestiges of the Wild, Wild West, where 
literally anything goes. Most of my colleagues who invest in OTCBB stocks 
have an almost impossible time trying to figure out the proper value of 
companies, because good news and increasing revenues and bright outlooks 
with high growth DO NOT translate into rising share prices.  Many times they 
fall, with rising volumes, and it seems the only reason has to do with naked 
shorting.  With no way to monitor this activity, watch for it, identify it 
and deal with it, the average small investor is at a serious disadvantage. 
Not only is the deck stacked against him, he can have a winning hand and 
still lose the pot.
     
These MM's will tell you they need the ability to short in order to have the 
liquidity necessary to make markets.  That may be true in some cases, but it 
is also a good excuse to obscure and camoflauge their activities, where they 
are aggressively taking unnecessary short positions to artficially suppress 
a stocks value.  It may be related to generating commissions on short sold 
stock, and unrelated to any making of a "fair" market.  Your average 
investor has no defense against these types of tactics, and really has no 
way of verifying they are even,  in fact,  going on.  There is no system in 
place monitoring this activity, which is a recipe tailor made for fraud and 
illegal transactions.  There are no checks and balances built into this 
system, no way for anyone to see who is taking short positions,  and it is 
currently geared towards the MM advantage.  Which is where they want to keep 
it.
     
The Internet age has many, many more small investors using computer 
resources to play the markets, investing in micro-cap issues as well as 
others.  Many times new investors are caught unawares they are playing by 
different rules, and watch helplessly as stocks that seemingly have 
everything going right for them inexplicably decrease in value, on rising 
volume.
     
I implore you to level the playing field in these types of security 
transactions.  We do not want advantages, and the market makers should not 
have them either.  Change the rules, and force them to reveal their 
positions.  They should not be able to short anymore stock than is needed to 
maintain a liquid market.
     
Thomas Lukenic
Director of Administration