Date:    06/20/2000  6:33 PM

Subject: Shorting on the OTC

With regard to S7-24-99: 
     
The abuses of the Market Makers on the OTC with regard to manipulation and 
shorting are being revealed with each passing day. 
     
On the other exchanges shorting must be reported and it should be no different 
on the OTC. Making shares out of thin air to "smooth and make markets" is 
patently absurd. The result the same as what happens when you allow the fox to 
guard the hen house.
     
I have watched numerous stocks suffer as MM's go short. "Secret shorting" is 
another problem that would be addressed if MM's simply had to report their short
positions.
     
Among those who trade in the OTC it is well known the situation is out of 
control. Many CEO's and CFO's have voiced their most legitimate concerns. Until 
now it has seemed futile to complain or write to the proper authorities.
     
I find it incredible that it has gone on with impunity for so long. The problem 
was realized and dealt with on the NYSE years ago. It should be clear that where
an opportunity for abuse exists there will always be those who will exploit that
opportunity. While I am of the belief that the majority of MM's are engaged in 
the day to day making of markets honestly, a small number is all it takes to 
cause huge problems.
     
The fact that there has been uproar on the side of the investor and traded 
companies should be evidence enough.
     
The fact that the MM's have responded that nothing is wrong and nothing should 
be done is their own indictment. If there was no problem and no need for 
oversight there wouldn't be any need for the SEC now would there? Why should 
there be any objection to allowing the SEC to regulate a problem that exists on 
the OTC?
     
 By the way I am fully for increases in budgeting for the SEC, yours is one of
the few agencies that brings in far and away more money than it spends. I 
believe that if you had more funding for investigations you would be shocked at 
the amount of shorting abuses you would uncover.
     
It is my great hope that the SEC will make sure that all markets are made safe 
from shorting abuses, and that those guilty of abuses do not go unpunished.
     
Ben H. Rogers
     
Maui HI