August 19, 2007
Ms. Nancy M. Morris, Secretary
U.S. Securities and Exchange Commission
100 F Street NE
Washington, D.C. 20549-9303
RE: File No. SR-NASD-2007-021
Dear Ms. Morris:
Please accept this email as my comment upon the proposed revised definition of “public arbitrator” under FINRA Rule 12100(u). I have been a litigation attorney for 28 years. I have litigated cases before judges, juries, state and federal courts and agencies (all levels including a request for Certiorari to the U.S. Supreme Court—97-1616).
Nothing brings more public ridicule on a “judicial” forum than perceived bias. The public is quick to reject bias (a Supreme Court Justice in Nebraska was recalled a number of years ago because of public concern about bias.) The current rules of arbitration under FINRA allow excessive bias in the system. In particular, the proposed rule change will help to reduce the “bias” in the system. While still high in many cases, the $50,000 income limit is an improvement from the current rules. Imagine facing a civil jury where 1 out of 3 jurors was employed by the insurance industry and had an income of $50,000.
I have practiced in the FINRA system for 18 years. I currently have a vacated arbitration decision pending in the Nebraska state court appellate system where the District Court agreed with me that an arbitrator, who failed to disclose an ownership interest in a respondent firm, was sufficiently biased to require a vacatur of the decision. It was luck and work to discover the ownership position held, UNDISCLOSED, by this arbitrator. It is nearly impossible to detect an arbitrator’s bias concerning income unless it is required to be disclosed. Setting zero income would be best. Jurors are struck when they show an interest in cases and Judges have similar rules under judicial ethical guidelines. How can this system purport to be a forum offering “justice” under the current (and may I suggest even with the new guidance)?
I encourage passage of the current rule. BUT, if you truly want to offer justice, address all unjust issues now (required industry arbitrator, training and education of arbitrators by the industry system and excessive fees).
Thank you in advance for your assistance with these critical matters.
Sincerely,
Gail E. Boliver
Gail E. Boliver
Boliver Law Firm