From: Stesney, Karl [mailto:karl.stesney@medtronic.com]
Sent: Thursday, March 14, 2002 4:57 PM
To: marketreg@sec.gov
Subject: Short selling price manipulation


Although I recognize that short selling is a legitimate trading strategy, there are times 
when this technique can be used to effectively manipulate stock prices. When a company has 
low float, large hedge funds can gang up on a stock and drive the price down. This strategy 
is often done in coordination with issuance of negative editorials by some investment 
publication or other journal. This should be illegal in my opinion. There needs to be 
limits on how much a company shares can be shorted.  There should be some formula rules 
or guidelines so that this manipulation can be stopped. ASW is a one example. The Street.com 
is notorious for issuing negative articles on companies and driving down the stock prices. 
Sometimes these articles have a basis in fact, but other times are based on innuendo. 
Anyone with a forum can make negative comments about a company regardless of how clean that 
company might be. The main point is that The Street.com is probably profiting from these 
articles by shorting the shares of companies prior to issuing the article. Or they may be 
in partnership with some hedge fund. The SEC must do something to stop this rampant price
manipulation. This collusion between journalists and hedge funds undermines confidence in 
the free market and allows some to unfairly profit at the expense of others.

Karl J. Stesney
Medtronic Xomed
Director of Finance 
904-279-7512