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

August 8, 2007

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

Dear Ms. Morris:

I have represented investors in mandatory SRO securities arbitrations for 15 years. For a variety of reasons, the securities arbitration system imposed on investors is unfair and biased in favor of the securities industry. One of the principal problems with the NASD arbitration forum is the requirement that one arbitrator on every panel be affiliated with the securities industry. That requirement is one of the provisions of the Code of Arbitration Procedure that tilts the playing field in the industry's favor and clearly creates an appearance of partiality in favor of the industry. Investors come to the process with the unavoidable and correct belief that the system is stacked against them.

This built-in inequity in the Code is exacerbated by conflicted arbitrators in the public pool of arbitrators, who, themselves, or whose firms receive substantial fees from securities industry clients. The proposed amendment to Rule 12100(u) is a partial step in the right direction, but it does not go far enough. The proposed amendment should be revised to provide that the receipt of $50,000 or more in fees by an arbitrator or the arbitrator's law firm from any securities industry-related engagements will disqualify the arbitrator from serving as a public arbitrator. In addition, as commenter Larry Schultz has suggested, the Code needs to be revised to require mandatory annual fee reporting by arbitrators and to require arbitrators to respond to party inquiries concerning conflicts of interest.


s/ Scott C. Ilgenfritz

Scott C. Ilgenfritz