From: Leonard Burningham [lwb@burninglaw.com] Sent: Monday, March 24, 2003 11:12 AM To: rule-comments@sec.gov Subject: DTC's Request for Rule Change to Prohibit Issuers From Exiting DTC Dear Ladies and Gentlemen: This is a supplement to the two responses that I have filed in objection to the DTC's recent proposal that is referenced above, one filed by facsimile on March 21, 2003, and one by email on March 22, 2003; I understand that the 35 day comment period has lapsed, but I was out of the country and would appreciate if if you would consider my comments. For years, small issuers have attempted to get information from DTC respecting whether DTC loans securities to those who engage in naked shorts of their securities or other information to determine the extent of naked shorts in their shares; the DTC has stonewalled them in every respect. I am familiar with at least one judgment against the DTC for damages for this conduct. In order to resolve naked shorts, issuers have had to resort to small dividends, name changes, requests to stockholders to order shares out of DTC or actually exiting DTC to get any result. The latter almost immediately requires brokers to cover their naked shorts, and these naked shorts are evident to DTC at all times. What DTC is trying to do is to perpetuate what it is now doing, without any potential liability for helping the conspiracy in naked shorts that has damaged so may small companies and their shareholders. Once someone exits DTC, you can be sure the naked shorts have to be covered to complete that; that is what the DTC is upset about, not preventing them. DTC was formed to assist in the non-paper transfer of securities to facilitate the transfer of securities in a timely manner; it was not set up to allow ruthless brokers and others to carry out a naked short of securities in small companies that damages the very shareholders whose shares are deposited. If shareholders knew this, none of them would consent to have their shares in DTC. You now have DTC before you as a result of their request, and this is an opportune time to find out the extent of the naked shorts and what its role in these shorts is. All persons should have to deliver in three days! I imagine if naked shorts that have to be covered put a brokerage company under, that SIPIC gets involved, and the shareholders pay for it again as tax paying citizens. While we are reforming the securities laws, this problem of naked shorts needs to be resolved! One SEC Branch Manager told me that he believes these come from Canada as the brokerage laws are different; isn't it time we found out, and if it is from Canada, why don't we work with their agencies to stop it?! Thank you. Leonard Leonard W. Burningham, Esq. 455 East 500 South, Suite 205 Salt Lake City, UT 84111 Phone: 801-363-7411 Fax: 801-355-7126 This transmission contains privileged and confidential information that is intended only for the above named person. If you are not the intended recipient, you are hereby notified that the disclosure of this communication is strictly prohibited. If you have received this transmission in error, please notify our office immediately and delete this original message. T hank you!