Date:    07/14/2000  2:05 PM

Subject: Market Maker Manipulation

More evidence of Market Maker Manipulation in the OTCBB.
     
Background: A veteran of 20 years as a Market Maker would seem to qualify this 
commentator. He's in private trading now, but has some definite conclusions 
regarding MMM and what must be done about it. He cites incidents of suspected 
manipulation in AREE and NUZA stocks, based on the numbers.
     
Investor Mike McIntyre writes: "First, one must ask themselves why do Market 
Makers get to hide in the OTCBB market, not revealing their short positions. 
This appears to be the main issue behind all of the problems. MMs should be 
required to hold a very limited amount of a short position (say 10%) which is 
not held by a paying customer/client."
     
"When Market Makers have an infrastructure in place that allows them to cheat, 
they will cheat. When they are allowed to -- behind closed doors -- have a HUGE 
short position and are never made to balance their position in the reasonable 
short term, they will never correct their positions. Full disclosure of short 
positions in all OTCBB stocks should be REQUIRED just like it is with the other 
markets: NYSE, NASDAQ and AMEX."
     
"It is my honest opinion that there has been ample evidence of late that Market 
Makers are manipulating OTCBB stocks. I believe that the law of supply and 
demand should apply. When more buying occurs, a stock should go up. When more 
selling occurs a stock should go down. This does not seem to be occurring." 
     
"I shall give two examples where I have personally been affected by MM 
Manipulation. The first is AREE, Arete Industries." 
     
Re: Arete Industries (OTCBB: AREE). The firm is in business of cultivating new 
start up or development stage businesses by providing managed fixed cost 
services, marketing and fulfillment services and executive management services, 
offering entrepreneurs liquidity as a publicly traded entity. It terminated its 
co-op coupon business earlier this year . The stock closed Wednesday at 3.9 
cents, up .002.
     
"Around April 20th," McIntyre wrote, "after the OTCBB & NASDAQ crash, AREE was 
around .08 cents. Since that time there has been approximately 89 million bought
and 10 million shares sold. According to the laws of supply and demand the price
should go UP. One might expect the stock to be around .11 or .12 cents if not 
more!"
     
"After all, for every share sold nearly 9 were bought! Today the stock is nearly
40% down from April 20th in unfair trading by MMs. I have sold 90% of my 
position in AREE." 
     
Re: N.U. Pizza Holding Corporation (OTCBB: NUZA). Since filing for bankruptcy 
protection in February, NUZA has had three months of improving cash flow as a 
result of both a reduction in expenses and an increase in revenues. President 
Dan Rouse says "We should have no problem developing a plan that allows us to 
meet all current obligations, pay off our creditors and grow". The stock was at 
about 6 cents in early June, dropped to about 3 cents, and closed Wednesday at 
3.5 cents.
     
"Since around May 10th," McIntyre wrote, "NUZA has had around 14 million shares 
bought and around 2 million shares sold. For every share sold, around 7 have 
been bought. The stock has fallen unfairly from .065 to .035."
     
"I still own around 280,000 shares of NUZA and to date can not recall selling 
any. I am divulging my positions in these stocks so as to be open and honest. 
Shouldn't the trading community have the same right from the Market Makers? 
Shouldn't MMs be required by the SEC to fully disclose their positions, both 
long and short?"
     
Comment: The evidence is admittedly anecdotal, because unless some repentant MM 
decides to spill his guts, no one has access to proof of MMM, and the MMs 
certainly want to keep it that way. But as the anecdotal evidence builds and the
pattern evolves, what are reasonable and objective investors to conclude? 
Otcnn.com.
                                    -------------------------------------
     
Please require the OTCBB Market Makers to operate with the same integrity 
demanded in the other markets you enforce. The lack of enforcement is allowing 
manipulation not tolerated by your agency, in other markets.This is a clear 
unfairness to the investors, and should be rectified swiftly. It is not right 
for our
(my) government to know about this problem, and be so slow to act. Same 
conduct & guidelines/requirements for the Market Makers should be employed 
and enforced across the markets. This should, and could be done without 
delay.
     
R. Richardson