From: Sandra Hicks [shicks@cfl.rr.com]
Sent: Tuesday, November 04, 2003 11:42 AM
To: rule-comments@sec.gov
Cc: eliot.spitzer@oag.state.ny.us
Subject: File No. S7-23-03

November 4, 2003

To:  Securities and Exchange Commission
     Office of Trading Practices, Division of Market Regulation

Re:  Proposed SHO Rules
Release No.  34-48709,   File No. S7-23-03

Re:  Comments to proposed SHO Rule changes
To the members of the Office of Trading Practices and the Division of 
Market Regulation

First, I must commend you and your colleagues for finally stepping up to 
the challenge and the resulting Release No. 34-48709, File No. S7-23-03.  
Rome was not built in a day, but many years were spent building it before 
it was burned.  The unfair trading practices that are addressed in Release 
No. 34-48709 have been going on for many years and you have struck only the 
first match toward destroying these unfair practices in an attempt to level 
the playing field.  That is all any small investor seeks is a level playing 
field in the marketplace without abuses resulting in market manipulations 
that have become an institution in and of themselves.

That said, the question becomes, "Is it enough?"

You will have received hundreds of comments regarding the technical adequacy 
and shortfalls of your proposal but my comments lean more toward the penalty 
phases.  I highly recommend sharp teeth and swift bites be considered if any 
abuses are to be ended.  This is certainly one case where based on past 
experience, "guilt" must be assumed and innocence must be proven and finally, 
ignorance is no defense.

The complexity and "bucket of worms" that such trading practices have become 
will be difficult, at best, to "fix" in such a way that investor confidence 
can be restored to a level where a free market based on supply and demand is 
provided in an open and honest atmosphere.  Many investors will have difficulty 
getting past the "fox guarding the hen house" nature of the marketplace.  
History has shown this challenge to have gone unresolved for many years.  Were 
it not for the actions of NYAG Eliot Spitzer and some state attorneys general 
actions, no investor would ever benefit from any action against the abusers.  
What the investor sees the SEC doing is to levy minimal fines against abusers, 
give them a small slap on the wrist and send them on their way to find new and 
improved methods for market manipulation.  Oh, and by the way, what does the 
SEC or stock exchange receiving the fines do with the money, - what the investor 
sees are very high pay outs to exchange executives, whose failure to prevent 
the abusive actions in the first place that allowed the investors to be ripped 
off.  If such funds are not to be returned to the investors to some degree, 
they should be used to fund additional investigators to stop the unfair and 
illegal practices of the institutions involved.  Let's agree that $100 million + 
could buy thousands of hours of investigative staff.

Discoveries of "illegal naked shorting" and “Failures to Deliver” should be 
investigated to the n'th degree and when penalties are imposed they must be 
much more than financial.  Broker/Dealers who are unwilling to restore an 
investors portfolio to previous levels as of a certain date should be considered 
for Securities Licenses revocation, offending companies stock trading should be 
halted, and a provision for a "death penalty" must be devised to gain the 
attention of senior managers of offending firms.  While "Death Penalties" imposed 
by the NCAA on college football programs have failed to completely resolve 
recruiting violations, it has stopped many and others have paid dearly for 
continuing the abuse.  Such should be the case in the Marketplace.  The Marketplace 
owes its existence to the small investor and it is the small investor that must 
be finally protected from the many abuses of the Marketplace.

I am one small investor that could cash out my positions and impose a one or two 
year moratorium on future investing.  What I invest are discretionary funds only 
and I could just as easily spend those funds on a European vacation rather than 
taking the family to Disney for a few days every year.   If millions of others 
in my position were to do the same, many in your industry would be without a 
paycheck in a few short months.  Cleaning up the abuses must be the personal 
goal of each of you and more radical measures may be required than you have yet 
imagined.

I echo the following that you have received from other investors commenting on 
your proposal:

"I plead with you to have the courage and leadership to do what you know in your 
hearts needs to be done to restore integrity to the marketplace and pride to 
your employees."  

"...put some serious teeth into your proposals, and close all escape routes 
and future inroads that the crooks are surely exploring, even now."

"Although some of the fraud and abuses you are addressing may have taken years 
to accumulate and play out, it is quickly robbing honest, hard working people 
of their dreams and their futures."

Please, when investors call the SEC and make inquiries as to what you are doing 
about abuses, provide the investors with updates, not just the general comments, 
i.e.  “we’re looking into it” or “we cannot comment due to ongoing investigation.”

Thank you for this opportunity to comment.

Sandra & Ken Hicks