Subject: File No. SR-NASD-2005-094
From: David Harrison, Esquire
Affiliation: Spivak & Harrison LLP

September 20, 2005

This is in response to Release No. 34-52332;
File No. SR-NASD-2005-094, relating to Amendments to the Classification of Arbitrators Pursuant to Rule 10308 of the NASD Code of Arbitration.

While it is commendable that the SEC and NASD are attempting to take steps to improve fairness in arbitrations, the proposed rule change does not further that objective.

From my perspective as an attorney practicing exclusively in securities arbitrations, if the objective is to create a fair and impartial arbitration panel it is imperative to remove the industry arbitrator altogether.

The question that has to be asked is why there is an industry arbitrator on panels. If you ask an investor, the likely response is to make sure an aggrieved investor loses at hearing. It is the role of attorneys to educate the trier of fact about the case and a sophisticated panel member is not necessary. In many cases, the industry arbitrator does not possess special knowledge but merely has loyalty towards the brokerage firm. For example, a brokerage firm defense attorney, who might not have expertise in an arbitrated matter is classified as an industry arbitrator. In many arbitrations, experts are retained to educate the panel about the case. Therefore, having an industry expert present serves no purpose. If the NASD is concern with the sophistication of panel members, they should increase arbitrator training.

Many times the industry arbitrator is a broker who was accused and/or held liable for wrongdoing himself. I do not know how it could be justified that these types of people are allowed to serve as arbitrators on the same issues.

In conclusion, if the SEC and NASD are serious about leveling the playing field, they should abolish the industry arbitrator.

Sincerely,

David Harrison, Esq.