Subject: Comments to Proposed NASD Rule

August 6, 2007

Nancy M. Morris, Secretary
U.S. Securities and Exchange Commission
100 F Street NE
Washington, D.C. 20549-9303

RE: SR-NASD-2007-021: Proposed Amendment to Rule 12100(u) of NASD Code

Dear Ms. Morris:

Having represented investors in arbitration for years I have concluded that one of the major flaws in the NASD arbitration system is condoning conflicted public arbitrators, particularly where NASD rules require that an industry arbitrator serve on every three person arbitration panel. The prospect of having two or even three conflicted arbitrators with a pro industry bias effectively destroys the prospect of ever getting a fair hearing.

First, I strongly oppose the requirement of the industry arbitrator on panels. Second, the NASD proposal to amend Rule 12100(u) will disqualify as public arbitrators professionals who for the last two years receive industry fees in excess of $50,000 annually from matters involving investor accounts or transactions. The NASD proposal must be revised in the interest of investor protection to apply the disqualification regardless of the nature of the industry engagement. One who receives substantial fees from the securities industry should not serve as a public arbitrator regardless of the nature of the work performed. It is the receipt of fees from the securities industry that creates the conflict and the appearance of bias.

I appreciate your making note of my comments and objections for consideration.

Sincerely,

Milton H. Fried, Jr.