Wizzard Considers Opting Out of the DTC Share Transfer System

PITTSBURGH, PA - Wizzard Software (OTCBB:WIZD) announced that the board of directors has authorized the company to formally investigate and proceed to opt out of the DTC Share Transfer System if management feels it will protect Wizzard shareholders from naked short selling. Naked Short Selling is not legal, according to US SEC rules. Naked short selling takes place where shares sold are never borrowed, never delivered by the seller, but nevertheless the seller collects money for the stock not delivered within the three days prescribed by NASD guidelines. The three-day settlement system run by the National Securities Clearing Corporation ("NSCC") does not ensure that shares that are sold in a transaction are ever delivered. The primary reason that moving to a non-DTC eligible status works in curtailing the illegal activity of Naked Short Selling is the responsibility for the completion of the purchase transaction. A DTC eligible security clears through the NSCC (National Securities Clearing Corporation), which in turn is responsible for making sure that the seller of the shares electronically delivers the position to the buyer. In the case of a naked short sale, the NSCC does not require the seller to deliver the shares. In physical form, the responsibility to complete the transaction (i.e. receive the shares that were purchased) falls to the purchasing broker, who, on settlement day, expects to receive the physical certificate. When this process begins, the broker can execute a "buy-in" -- buying shares from the market to complete the transaction for his customer -- who typically has no idea that the shares they paid for were never delivered. "We have been monitoring several companies who have chosen to opt out of the DTC Share Transfer System over the last three months. The effect seems to have created a more reliable market for their stock and has proven to increase shareholder value in the short term," says Chris Spencer, Wizzard CEO. "Once our attorneys have completed the necessary due diligence on this matter, the Company will act swiftly for our shareholders."
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