Subject: File # S7-5-99 Author: "Michael Zapara" at Internet Date: 4/7/99 12:07 PM Date: 4/6/99 2:20 PM Subject: File No. S7-5-99 I am opposed to the proposed amendment to Rule 15c-211 by the SEC. Please contact them and tell then this is not in the best interest of small business in California I believe that the SEC is well-intentioned in its efforts to combat microcap fraud, but fails to recognize the impractical and onerous burden this amendment would place on legitimate market makers. Under these amendments, the responsibility of regulating and policing small company issuers, whether reporting or non-reporting, would effectively shift from the SEC to the market makers who trade in these stocks. Market makers who choose to continue trading these issues would either risk unlimited liability for the accuracy and truthfulness of financial information over which they have no control, or have to undertake the significant additional costs related to effective due diligence on each and every issue for which they make a market. Still, they would leave themselves open to crushing lawsuits from plaintiffs' attorneys and disgruntled investors anytime a stock turns down. No legitimate market maker is going to accept that responsibility. Instead, if this rule is implemented, legitimate market makers cease to quote OTC Bulletin Board and "Pink Sheets" stocks. The end result means no liquidity for small company stocks and, consequently, a loss in price transparency, bigger spreads, a drop in stock prices -- and less protection from fraud for microcap investors! In fact, according to respected Business Week investment commentator Gary Weiss, this rule would play right into the hands of scam artists who manipulate stock prices, since they would dominate the microcap market once legitimate traders pulled out. In short, these proposed amendments would irreparably damage both the markets and the companies whose securities are traded in these markets and all investors how have invested in these companies Please see that this Amendment is not passed. Thank you Michael Zapara 42450 Bob Hope Dr., #225 Rancho Mirage, CA 92270 Fax 760.340.6629 Zee@GTE.NET