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[letterhead]
Professor Leonard Rosenthal
106 Walnut Hill Road
Newton, MA 02461
Phone No. 781-891-2516
January 13, 2004
Mr. Stephen Cutler
Division of Enforcement
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Farmer Bros. Co.
Dear Mr. Cutler:
I am the lead plaintiff in the shareholder lawsuit referred to in Gary
Lutin’s letter to you dated January 8, 2004. In addition to being a
shareholder in Farmer Bros. I am also a finance professor at Bentley
College in Waltham, MA. I have been a finance professor here and at two
other universities since 1976.
As an academic teaching finance and currently engaged in an extensive
project on corporate governance, I have come to believe that there is no
area that is of more importance to the well functioning of our capital
markets. Indeed, after having taught a course this past spring on the major
corporate scandals of the last few years, I firmly believe that
poor/non-existent corporate governance led to the various fiascos that we
have observed. That is why I got involved in the Farmer Bros. case. To me
it represents one of the most egregious examples of management attempts to
entrench itself and to deny shareholders their rights.
It is essential for the S.E.C. to assure compliance with the rules of the
capital markets. Given the recent court ruling, nobody other than the S.E.C
can enforce our securities laws. In the case of Farmer Bros. unless you act
to disallow the voting of improperly acquired shares, the non-management
shareholders will continue to have their rights trampled on.
Finally, the Farmer Bros. situation is about more than just one company. It
is about all publicly traded firms which use whatever means they can to
abridge/eliminate the rights of the non-management shareholders. Our
economic system will ultimately break down if shareholders believe that
their rights will not be looked after by the S.E.C.
Sincerely,
Leonard Rosenthal, Ph.D.
cc. The Commissioners
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