August 8, 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 the NASD Code of Arbitration Procedure, Which Pertains to Definition of Public Arbitrator
Dear Ms. Morris:
I write with respect to the above proposed Amendment. I have been a licensed attorney for twenty seven years. I have prosecuted street criminals as an assistant district attorney; I have prosecuted corrupt businesses as a deputy attorney general; I have worked in the brokerage industry as a retail broker for a major wirehouse ; I am an arbitrator for the NASD; I represent claimants against those in the brokerage industry who would take advantage of customers who place their trust in those industry professionals.
When I became a NASD arbitrator I did so with the naive belief that the system could, and would, provide a cost efficient and equitable forum for the prompt and fair resolution of customer complaints. The promise, in my experience, is far removed from the reality. The above referenced proposal is a small step toward making the system a bit more fair to customers, but only a very small step.
Other members of PIABA have written scholarly and insightful comments regarding this rule. I am not going to restate any of those positions which they have articulated so well. My only comment on this rule, and the NASD arbitration system in general, is shame on the SEC. I don't expect the industry to be even-handed when policing itself-- self interest is self interest. But the SEC has the responsibility to protect the public. Instead, the SEC allows a monopolistic arbitration system where one of the three decision makers can feed at the brokerage money trough each and every day, while the other two decision makers, or their partners, can feed there periodically without any real accountability.
So, does this proposal make the system a little more fair? Probably. Does this fool those who understand the system? Not at all. Until the SEC uses its influence and its authority to make the arbitration system at least as fair as the judicial system (by making it voluntary, for example), the SEC will only be able to fool some of the people, some of the time.
Rob Bleecher, Esquire