Petition for Redress of the United States Securities and Exchange Commission

Amendment I - Freedom of Religion, Press, Expression.
Ratified 12/15/1791. Note

Congress shall make no law respecting an establishment of
religion, or prohibiting the free exercise thereof; or
abridging the freedom of speech, or of the press; or the
right of the people peaceably to assemble, and to petition
the Government for a redress of grievances.

We, the undersigned, respectfully request redress of the
grievances below, as we believe that, as provided for all
under the Constitution of the United States of America, all
men are created equal.
Whereas, if a common person owed a considerable amount
of capital to a Federal agency, it would be required by law
that the debt be paid otherwise the person could be
convicted of theft and/or have his/her assets liquidated to
compensate for the said debt,
Whereas, it is a crime punishable by law to sell anything
that is not individually owned by the seller, or without the
consent of the legitimate owner,
Whereas, it is a crime, according to the Constitution of the
United States of America, to counterfeit United States
securities and current coin,
Whereas, it is the duty of the United States Congress
under Constitutional law, To provide for the Punishment of
counterfeiting the Securities and current Coin of the United
States,
Whereas, it is the duty of the United States Congress to
make all Laws which shall be necessary and proper for
carrying into Execution the foregoing Powers, and all other
Powers vested by this Constitution in the Government of
the United States, or in any Department or Officer thereof,
We respectfully request that the following questions be
answered:
If the above statements are true, with the Constitution of
the United States of America providing much of the
evidence, how can another set of rules be adopted by the
Securities and Exchange Commission, without the approval
of Congress?
If counterfeiting is indeed a crime, what would the
difference be as opposed to naked short selling?
The following excerpt is available for viewing at the
Securities and Exchange Commission's website, otherwise
the outright approval to counterfeit for self regulatory
agencies:
Naked short selling is not necessarily a violation of the
federal securities laws or the Commission's rules. Indeed,
in certain circumstances, naked short selling contributes to
market liquidity. For example, broker-dealers that make a
market in a security4 generally stand ready to buy and sell
the security on a regular and continuous basis at a publicly
quoted price, even when there are no other buyers or
sellers. Thus, market makers must sell a security to a
buyer even when there are temporary shortages of that
security available in the market. This may occur, for
example, if there is a sudden surge in buying interest in
that security, or if few investors are selling the security at
that time. Because it may take a market maker
considerable time to purchase or arrange to borrow the
security, a market maker engaged in bona fide market
making, particularly in a fast-moving market, may need to
sell the security short without having arranged to borrow
shares. This is especially true for market makers in thinly
traded, illiquid stocks such as securities quoted on the OTC
Bulletin Board,5 as there may be few shares available to
purchase or borrow at a given time.
Regulation SHO, the threshhold securities list, a feable
attempt to appease investors, and forgive past abuses by
clearance corporations, market makers, and hedgefunds.
http://www.sec.gov/spotlight/keyregshoissues.htm
III. Regulation SHO
Compliance with Regulation SHO began on January 3,
2005. Regulation SHO was adopted to update short sale
regulation in light of numerous market developments since
short sale regulation was first adopted in 1938. Some of
the goals of Regulation SHO include:

Establishing uniform "locate" and "close-out" requirements
in order to address problems associated with failures to
deliver, including potentially abusive "naked" short selling.

Locate Requirement: Regulation SHO requires a broker-
dealer to have reasonable grounds to believe that the
security can be borrowed so that it can be delivered on the
date delivery is due before effecting a short sale order in
any equity security.6 This "locate" must be made and
documented prior to effecting the short sale.

"Close-out" Requirement: Regulation SHO imposes
additional delivery requirements on broker-dealers for
securities in which there are a relatively substantial
number of extended delivery failures at a registered
clearing agency7 ("threshold securities"). For instance,
with limited exception, Regulation SHO requires brokers
and dealers that are participants of a registered clearing
agency8 to take action to "close-out" failure-to-deliver
positions ("open fails") in threshold securities that have
persisted for 13 consecutive settlement days.9 Closing out
requires the broker or dealer to purchase securities of like
kind and quantity. Until the position is closed out, the
broker or dealer and any broker or dealer for which it clears
transactions (for example, an introducing broker)10 may
not effect further short sales in that threshold security
without borrowing or entering into a bona fide agreement
to borrow the security (known as the "pre-borrowing"
requirement).

Temporarily suspending Commission and SRO11 short sale
price tests12 in a group of securities to evaluate the overall
effectiveness and necessity of such restrictions. The
Commission will study the impact of relaxing the price tests
for a period of one year.13

Creating uniform order marking requirements for sales of
all equity securities. This means that orders you place with
your broker-dealer must be marked "long," "short," or
"short exempt."14

IV. Threshold Securities
A. The Basics
1. What is a Threshold Security?

Threshold securities are equity securities that have an
aggregate fail to deliver position for:

five consecutive settlement days at a registered clearing
agency (e.g., National Securities Clearing Corporation
(NSCC));15

totaling 10,000 shares or more; and

equal to at least 0.5% of the issuer's total shares
outstanding.16

Threshold securities only include issuers registered or
required to file reports with the Commission ("reporting
companies").17 Therefore, securities of issuers that are not
registered or required to file reports with the Commission,
which includes the majority of issuers on the Pink
Sheets,18 cannot be threshold securities. This is because
the SROs need to look to the total outstanding shares of
the issuer in order to calculate whether or not the
securities meet the definition of a "threshold security." For
non-reporting companies, reliable information on total
outstanding shares is difficult to determine.

2. Who is Responsible for Identifying Threshold Securities?

Regulation SHO requires the SROs to disseminate a daily
list of threshold securities where such SRO, or its market
center,19 is the primary listing venue for any such
security.

3. Where Can I Find Threshold Lists?

Each SRO is responsible for providing the threshold
securities list for those securities for which the SRO is the
primary market. You can obtain SRO threshold lists at the
following websites:

Nasdaq: http://www.nasdaqtrader.com/aspx/regsho.aspx
(includes Nasdaq issues, OTCBB, and other OTC issues)

NYSE: http://www.nyse.com/Frameset.html?
displayPage=/threshold/

AMEX:
http://www.amex.com/amextrader/tradingData/RegSHO/Tr
Da_RegSHO.jsp (Amex listed securities only)

CSE: http://www.chx.com/publications/reg_sho.htm

ArcaEx: http://www.tradearca.com/traders/regsho_th.asp

The Boston Stock Exchange, Philadelphia Stock Exchange
and National Stock Exchange are not the primary listing
exchange for any securities at this time and, therefore, are
currently not publishing threshold securities lists.

4. Inclusion on, and Removal from, Threshold Lists.

At the conclusion of each settlement day, NSCC provides
the SROs with data on securities that have aggregate fails
to deliver at NSCC of 10,000 shares or more. For the
securities for which an SRO is the primary market, that
SRO calculates whether the level of fails for each security is
equal to, or greater than, 0.5% of the issuer's total shares
outstanding of the security. If, for five consecutive
settlement days, such security satisfies these criteria, then
such security is a threshold security. Each SRO includes
such security on its daily threshold list until the aggregate
fails level for the security falls below these levels for five
consecutive days. (See below for a discussion as to why a
security may appear or remain on a threshold list.)

5. Implementation Dates for Threshold Lists.

The SROs disseminated the first threshold lists on January
10, 2005. Regulation SHO does not require a broker or
dealer to close-out the open fail position until a security
appears on a threshold list for 13 consecutive settlement
days and an open fail position for such security exists for
each of those days.. Therefore, the first day on which a
close-out action could have been required for a threshold
security was January 28, 2005.

6. Mandatory Close-Outs of Threshold Securities.

Regulation SHO requires broker-dealers to close-out all
failures to deliver that exist in threshold securities for
thirteen consecutive settlement days by purchasing
securities of like kind and quantity ("close-out").20

Until the position is closed out, the broker or dealer and
any broker or dealer for which it clears transactions (for
example, an introducing broker),21 may not effect further
short sales in that threshold security without borrowing or
entering into a bona fide agreement to borrow the security
(known as a "pre-borrowing" requirement).

7. Key Points to Remember.

Any equity security of an issuer that is registered or
required to file reports with the Commission could qualify
as a threshold security. Therefore, threshold securities may
include equity securities:

listed on an exchange, 22

quoted on Nasdaq,23 or

quoted on the OTCBB.24

Whether or not a security is a threshold security does not
affect the Commission's ability to prosecute manipulative
or fraudulent activity that may have occurred before or
after adoption of Regulation SHO.

B. Reasons Why A Security May Appear on a Threshold List
A security's appearance on a threshold list does not
necessarily mean that any improper activity has occurred
or is occurring. An equity security will appear on a
threshold list if it meets the definition of a threshold
security set forth in Regulation SHO, meaning that failures
to deliver the stock (i.e. to the party on the other side of
the trade) have reached an aggregate of 10,000 shares or
greater at NSCC for five consecutive settlement days and
are equal to 0.5% of total shares outstanding;

C. Reasons Why A Security May Stay on a Threshold List
for Longer Than 13 Consecutive Settlement Days
Even when broker-dealers close-out delivery failures, a
security may remain on an SRO's threshold securities list
for longer than 13 days. Examples of why securities may
remain on the threshold securities list:

after broker-dealers close-out all delivery failures, the
security stays on the threshold list for five consecutive
days;

new delivery failures resulting from long or short sales may
have crossed the threshold, keeping the security on the
SRO's threshold securities list; or

the delivery failures at NSCC may have been established
prior to a security's appearance on the SRO's threshold
securities list, and are grandfathered from the close-out
requirement of Regulation SHO.

For information about specific securities, contact the
appropriate SRO or its market center listed above.

D. Reasons Why A Security With a Large Short Position
May Not Appear on a Threshold List
There are various reasons why an equity security with a
large short position may not appear on an SRO's threshold
securities list, 25 for example:

the aggregate delivery failures do not meet the definition of
a threshold security in Regulation SHO;

the security's issuer is not registered or required to file
reports with the Commission. For instance, the majority of
issuers quoted on the Pink Sheets do not file reports or
register with the Commission, and so would not appear on
threshold lists.26
E. Who Do I Contact For More Information About Securities
On a Threshold List?If you have a question regarding a
security on a particular SRO's threshold security list,
contact that SRO directly. F. Grandfathering
Under Regulation SHO
The requirement to close-out fail to deliver positions in
threshold securities that remain for 13 consecutive
settlement days does not apply to positions that were
established prior to the security becoming a threshold
security. This is known as "grandfathering." For example,
open fail positions in securities that existed prior to the
effective date of Regulation SHO on January 3, 2005 are
not required to be closed out under Regulation SHO.

The grandfathering provisions of Regulation SHO were
adopted because the Commission was concerned about
creating volatility where there were large pre-existing open
positions. The Commission will continue to monitor
whether grandfathered open fail positions are being
cleaned up under existing delivery and settlement
guidelines or whether further action is warranted.

It is important to note that the "grandfathering" clause of
the Regulation does not affect the Commission's ability to
prosecute violations of law that may involve such securities
or violations that may have occurred before the adoption of
Regulation SHO or that occurred before the security
became a threshold security.

How many stocks on the threshhold securities list have
remained there for more than the time the regulation
alotted?
How many "forced buy-ins" have occurred?

http://www.nasdaqtrader.com/aspx/regsho.aspx

How can the Securities and Exchange Commission
guarantee limited liability for negligence and/or misconduct
to any entity or establishment without the approval of
Congress?
See rule below:

http://www.sec.gov/rules/sro/nscc/34-51669.pdf#search
SECURITIES AND EXCHANGE COMMISSION
(Release No. 34-51669; File No. SR-NSCC-2004-09)
May 9, 2005
Self-Regulatory Organizations; National Securities Clearing
Corporation; Order Approving Proposed Rule Change to
Establish a Comprehensive Standard of Care and Limitation
of Liability to its Members
I. Introduction
On December 8, 2004, the National Securities Clearing
Corporation ("NSCC") filed with the Securities and
Exchange Commission ("Commission") proposed rule
change SR-NSCC-2004-09 pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 ("Act").1 Notice of the
proposal was published in the Federal Register on April 6,
2005.2 No comment letters were received. For the reasons
discussed below, the Commission is approving the proposed
rule change.
II. Description
NSCC is establishing a comprehensive standard of care and
limitation of liability with respect to its members.
Historically, the Commission has left to user-governed
clearing agencies the question of how to allocate losses
associated with, among other things, clearing agency
functions.3 The Commission has reviewed clearing agency
services on a case-by-case basis and in determining the
appropriate standard of care has balanced the need for a
high degree of clearing agency care with the effect the
resulting liabilities may have on clearing agency
1 15 U.S.C. 78s(b)(1).
2 Securities Exchange Act Release No. 51458 (March 31,
2005), 70 FR 17494.
3 Securities Exchange Act Release Nos. 20221 (September
23, 1983), 48 FR 45167 and 22940 (February 24, 1986),
51 FR 7169.
2
operations, costs, and safekeeping of securities and funds.4
Because standards of care represent an allocation of rights
and liabilities between a clearing agency and its members,
which are generally sophisticated financial entities, the
Commission has refrained from establishing a unique
federal standard of care and generally has allowed clearing
agencies and other self-regulatory organizations and their
members to establish their own standards of care.5 In
addition, the Commission has recognized that a gross
negligence standard of care is appropriate for certain
noncustodial functions where a clearing agency, its board
of directors, and its members determine to allocate risk to
individual service users.6
NSCC believes that adopting a uniform rule7 limiting
NSCC's liability to its members to
4 Id.
5 Id.
6 Securities Exchange Act Release No. 26154 (October 3,
1988), 53 FR 39556. NSCC's services provided to members
are noncustodial in that, other than clearing fund deposits,
it does not hold its members funds or securities.
7 New Section 2 of Rule 58 states:
SEC. 2. Notwithstanding any other provision in the Rules:
(a) The Corporation will not be liable for any action taken,
or any delay or failure to take any action, hereunder or
otherwise to fulfill the Corporation's obligations to its
Members including Settling Members, Settling Bank Only
Members, Municipal Comparison Only Members, Insurance
Carrier Members, TPA Members, Mutual Fund/Insurance
Services Members, Non-Clearing Members, Fund Members
and Data Services Only Members, other than for losses
caused directly by the Corporation's gross negligence,
willful misconduct, or violation of Federal securities laws for
which there is a private right of action. Under no
circumstances will the Corporation be liable for the acts,
delays, omissions, bankruptcy, or insolvency, of any third
party, including, without limitation, any depository,
custodian, sub-custodian, clearing or settlement system,
transfer agent, registrar, data communication service or
delivery service ("Third Party"), unless the Corporation was
grossly negligent, engaged in willful misconduct, or in
3
direct losses caused by NSCC's gross negligence, willful
misconduct, or violation of Federal
(..continued)
violation of Federal securities laws for which there is a
private right of action in selecting such Third Party.
(b) Under no circumstances will the Corporation be liable
for any indirect, consequential, incidental, special, punitive
or exemplary loss or damage (including, but not limited to,
loss of business, loss of profits, trading losses, loss of
opportunity and loss of use) howsoever suffered or
incurred, regardless of whether the Corporation has been
advised of the possibility of such damages or whether such
damages otherwise could have been foreseen or prevented.
(c) With respect to instructions given to the Corporation by
a Special Representative/Index Recipient Agent, the
Corporation shall have no responsibility or liability for any
errors which may occur in the course of transmissions or
recording of any transmissions or which may exist in any
magnetic tape, document or other media so delivered to
the Corporation.
(d) With respect to the Corporation's distribution facilities,
the Corporation assumes no responsibility whatever for the
form or content of any tickets, checks, papers, documents
or other material (other than items prepared by it)placed in
the boxes in its distribution facilities assigned to each
Settling Member, Municipal Comparison Only Member,
Insurance Carrier Member, TPA Member, Fund Member and
Data Services Only Member, or otherwise handled by the
Corporation; nor does the Corporation assume any
responsibility for any improper or unauthorized removal
from such boxes or from the Corporation's facilities of any
such tickets, checks, papers, documents or other material,
including items prepared by the Corporation.
(e) With respect to Fund/Serv transactions, the
Corporation will not be responsible for the completeness or
accuracy of any transaction or instruction received from or
transmitted to a Settling Member, Data Services Only
Member, TPA Member, TPA Settling Entity, Mutual Fund
Processor or Fund Member through Fund/Serv, nor for any
errors, omissions or delays which may occur in the
transmission of a transaction or instruction to or from a
Settling Member, Data Services Only Member, TPA
Member, TPA Settling Entity, Mutual Fund Processor or
Fund Member.
(f) The Corporation will not be responsible for the
completeness or accuracy of any IPS Data and Repository
Data received from or transmitted to an Insurance Carrier
Member, Member or Data Services Only Member through
IPS nor for any errors, omissions or delays which may
occur in the transmission of such IPS Data and Repository
Data to or from an Insurance Carrier Member, or Data
Services Only Member.
4
securities laws for which there is a private right of action
will: (1) memorialize an appropriate commercial standard of
care that will protect NSCC from undue liability;8 (2)
permit the resources of NSCC to be appropriately utilized
for promoting the accurate clearance and settlement of
securities; and (3) will be consistent with similar rules
adopted by other self-regulatory organizations and
approved by the Commission.9
III. Discussion
Section 19(b) of the Act directs the Commission to approve
a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations
thereunder applicable to such organization. Section
17A(b)(3)(F) of the Act requires that the rules of a clearing
agency be designed to assure the safeguarding of securities
and funds which are in its custody or control.10 The
Commission believes that NSCC's rule change is consistent
with this Section because it will permit the resources of
NSCC to be appropriately utilized to protect funds and
assets.
8 NSCC has always operated under a gross negligence
standard of care and both internal and external counsel
have consistently advised members that this is the case.
NSCC is seeking to eliminate any confusion due to the
absence of a clear standard set forth in its rules and to
memorialize its historical practice. In addition, NSCC has in
effect a service agreement with the Fixed Income Clearing
Corporation ("FICC") pursuant to which FICC provides
services for NSCC's fixed income products. This service
agreement provides for a gross negligence standard of care.
In the absence of this new rule, NSCC could be in the
position of having to pay for losses caused by FICC that are
not recoverable under the agreement.
9 See, e.g., Securities Exchange Act Release Nos. 37421
(July 11, 1996), 61 FR 37513 [File No. SR-CBOE-96-02];
37563 (August 14, 1996), 61 FR 43285 [File No. SR-PSE-
96-21]; 48201 (July 21, 2003), 68 FR 44128 [File No. SR-
GSCC-2002-10]; and 49373 (March 8, 2004), 69 FR
11921 [File No. SR-FICC-2003-09].
10 15 U.S.C. 78q-1(b)(3)(F).
5
Although the Act does not specify the standard of care that
must be exercised by registered clearing agencies, the
Commission has determined that a gross negligence
standard of care is acceptable for noncustodial functions
where a clearing agency and its participants contractually
agree to limit the liability of the clearing agency.11 NSCC's
functions are noncustodial in that it does not hold its
members' funds or securities. It is reasonable for NSCC,
which is member-owned and governed, and its members to
agree through board approval of the proposed rule change
and to contract with one another in a cooperative
arrangement as to how to
11 In the release setting forth standards that would be
used by the Division of Market Regulation in evaluating
clearing agency registration applications, the Division of
Market Regulation urged clearing agencies to embrace a
strict standard of care in safeguarding participants' funds
and securities. Securities Exchange Act Release No. 16900
(June 17, 1980), 45 FR 4192. In the release granting
permanent registration to The Depository Trust Company,
the National Securities Clearing Corporation, and several
other clearing agencies, however, the Commission
indicated that it did not believe that sufficient justification
existed at that time to require a unique federal standard of
care for registered clearing agencies. Securities Exchange
Act Release No. 20221 (October 3, 1983), 48 FR 45167.
In a subsequent release, the Commission stated that the
clearing agency standard of care and the allocation of rights
and liabilities between a clearing agency and its participants
applicable to clearing agency services generally may be set
by the clearing agency and its participants. In the same
release, the Commission stated that it should review
clearing agency proposed rule changes in this area on a
case-by-case basis and balance the need for a high degree
of clearing agency care with the effect resulting liabilities
may have on clearing agency operations, costs, and
safeguarding of securities and funds. Securities Exchange
Act Release No. 22940 (February 24, 1986), 51 FR 7169.
Subsequently, in a release granting temporary registration
as a clearing agency to The Intermarket Clearing
Corporation, the Commission stated that a gross
negligence standard of care may be appropriate for certain
noncustodial functions that, consistent with minimizing
risk mutualization, a clearing agency, its board of directors,
and its members determine to allocate to individual service
users. Securities Exchange Act Release No. 26154 (October
3, 1988), 53 FR 39556. Finally, in a release granting the
approval of temporary registration as a clearing agency to
the International Securities Clearing Corporation, the
Commission indicated that historically it has left to user-
governed clearing agencies the question of how to allocate
losses associated with noncustodial, data processing,
clearing agency functions and has approved clearing
agency services embodying a gross-negligence standard of
care. Securities Exchange Act Release No. 26812 (May 12,
1989), 54 FR 21691.
6
allocate NSCC's liability among NSCC and its members.
Therefore, the Commission has determined that given the
noncustodial nature of NSCC's services, a gross negligence
standard of care and limitation of liability is allowable for
NSCC.12
IV. Conclusion
On the basis of the foregoing, the Commission finds that
the proposed rule change is consistent with the
requirements of the Act and in particular Section 17A of
the Act and the rules and regulations thereunder.
IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2)
of the Act, that the proposed rule change (File No. SR-
NSCC-2004-09) be and hereby is approved.
12 The Commission notes that the rule change does not
alleviate NSCC from liability for violation of the Federal
securities laws where there exists a private right of action
and therefore is not designed to adversely affect NSCC's
compliance with the Federal securities laws and private
rights of action that exist for violations of the Federal
securities laws.
7
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.13
Margaret H. McFarland
Deputy Secretary
13 17 CFR 200.30-3(a)(12).

If, all men are created equal, we should live and be
governed by one set of laws,rules, and regulations, instead
of certain privileged individuals and corporations, having
the influence to have laws, rules, and regulations,
constructed to their advantages. America was once the
"land of opportunity" for everyone regardless of race,
religion, age, sex, or financial status. It has became the
"land of opportunity" for those who have the ability to
manipulate and control. Sadly, it is "puppetmasters" such
as these that are responsible for financing drug trafficking,
terrorism, corporate crime, and crimes against the liberties
that this country was founded upon.
Companies and shareholders are being robbed of their
dreams, as well as their investments. If these injustices
are permitted, and the criminals have laws taylored to
meet their needs, I say this is not the country our
founding fathers thought to be the land of liberty.
If a person puts all of his effort towards the "American
dream", only to have the dream stolen from him, and the
government permits the abuses without imposing
penalties, I say we have ceased to become what our
founding fathers called America.
I request that you redress the United States Securities and
Exchange Commission and the following regulations and
rules respectively:

SECURITIES AND EXCHANGE COMMISSION
17 CFR PARTS 240, 241 and 242
[Release No. 34-50103; File No. S7-23-03]
RIN 3235-AJ00
SHORT SALES

http://www.sec.gov/rules/sro/nscc/34-51669.pdf#search=

The United States Congress was placed in charge to direct
commissions such as these with regards to rules and
regulations that are in the best interests of the investor,
and not just a choice few. These commissions do not have
the broad knowledge needed to regulate and legislate
themselves, nor do they have that authority.

What the investors and publicly traded companies of
America want is a fair market, free of corruption. This
cannot be done if the commission is permitted to legislate
themselves, for they have became tainted and biased in
the eyes of the common investor.

The U.S. Securities and Exchange Commission is more
than aware of the corruption and abuse that has infiltrated
the stock market in the past as well as the present, yet
they have neglected to take action to provide relief to
companies and investors. The following petition is available
for viewing on the U.S. Securities and Exchange
Commission's website, along with many other letters
voicing complaints to the commission about naked short
selling, regulation SHO, price manipulation, clearance
corporations, and hedgefunds. This petition was sent to
the U.S. Securities and Exchange Commission from R.
Cromwell Coulson, Chairman and CEO of the Pink Sheets.
Dear OTC Investor:

I am writing to alert you of a very important rule change
that is needed to improve the OTC marketplace. I need
your help to make regulators turn on the lights and protect
investors from the menace of hidden short selling in the
OTC market.

I think you'll agree that this issue deserves the small
amount of your time it will take for you to tell the SEC
what you think about this issue.

As Chairman & CEO of the Pink Sheets, I know perhaps
better than anyone the importance of improving the Pink
Sheets and OTCBB trading. And I know the devastating
impact that small companies face when their market is
tarnished by the threat of manipulation.

There is a crisis facing the OTC market today in the lack of
short sale position reporting and disclosure for OTC issues.
This lack of transparency regarding short selling in the OTC
market allows fraudulent acts to go undiscovered and
manipulative short sellers to hide.

I believe regulators should fix the problem. Small issuers
traded on the Pink Sheets and the OTCBB deserve the
same transparency and regulatory oversight of short selling
as those listed on Exchanges or NASDAQ.

Therefore, Pink Sheets has petitioned the SEC to cause the
amendment of NASD Rule 3360 and require NASD broker
dealers to maintain a record of total "short" positions in all
customer and proprietary firm accounts in all publicly
traded equity securities as well as report this information to
the NASD for public dissemination of the short positions by
security. The SEC's action is urgently needed to prevent
fraudulent acts, expose market manipulation, promote fair
principles of trade and protect investors.

Our full rule change request is available for you to read at:
http://sec.gov/rules/petitions/petn4-500.pdf and
comments by other concerned OTC market participants are
available at: http://sec.gov/rules/petitions/4-500.shtml

But I cannot make this important rule change happen
without your help. Thus I'm asking you to write a letter
today, and voice your support to the SEC for the Pink
Sheets' Request for Rulemaking Regarding Member Records
of "Short" Positions and Reporting and Public
Dissemination.

So please send your comments via Email to: rule-
comments@sec.gov with a Cc: copy to: pubcom@nasd.com

Or, if it's more convenient, you can mail your comments
to:

Jonathan G. Katz
Secretary, Securities Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

With a copy to:

Barbara Z. Sweeney
Senior Vice President and Corporate Secretary, NASD
1735 K Street, NW
Washington DC 20006-1500;

Either way, your Email or letter should refer to SEC File No.
4-500. Request for Rulemaking Regarding Member Records
of "Short" Positions and Reporting and Public Dissemination
of Aggregate Positions by Security.

I know I'm asking you to do a lot. But it's important that
we make the OTC market transparent and fairly regulated.
I think you'll agree that this issue deserves the small
amount of your time to tell the SEC what you think about
this issue.

Remember, the only way to succeed in achieving this rule
change is through the public outcry of investors demanding
the SEC make this needed improvement to the OTC
markets, and there is no substitute for your personal voice
in this debate. This important rule change is not going to
happen if you remain silent.

So please, don't rely on others to get the job done. Write
your Emails or letters today. Together, we must win this
battle and convince the SEC not to treat the OTC
secondary markets for small companies as second class
citizens.

Without this rule change investors and securities
regulators will be blind to any short selling activity in Pink
Sheets and OTCBB stocks. The SEC needs to know that the
lack of short sale information in your securities is
unacceptable and demand they change NASD Rule 3360
immediately.

I'm asking for your help to improve this critical part of the
securities market, so that companies like yours will be
traded in transparent, efficient and well regulated OTC
markets. Please do your part by writing your Email or letter
today. Every voice counts in the debate, and yours could
be the one that puts us over the top.

Thank you for your time and help in this fight.

Sincerely,

R. Cromwell Coulson
Chairman & CEO

P.S. We can only succeed in making these rule changes
with your help. So please, take action today. And once
again, thank you very much for your help.

Note: To comment to the SEC via Internet, use rule-
comments@sec.gov with a Cc: copy to: pubcom@nasd.com

File No. 4-500. Request for rulemaking regarding member
records of "short" positions and reporting and public
dissemination of aggregate positions by security.

SEC Public Petition page:
http://sec.gov/rules/petitions.shtml

Pink Sheets request is available at:
http://sec.gov/rules/petitions/petn4-500.pdf

Comments by other concerned OTC market participants are
available at: http://sec.gov/rules/petitions/4-500.shtml

I humbly ask that you do all that is within your power to
correct that which needs to be corrected.