Subject: File No. SR-NASD-2005-094
From: Jan Graham
Affiliation: P.I.A.B.A.

September 19, 2005

To the Honorable Secretary
Jonathan G. Katz
Securities and Exchange Commission
100 F. Street, N.E.
Washington, D.C 20549-9393

Re: File No. SR-NASD-2005-094
Public Arbitrator Definition

Dear Secretary Katz:

I have been representing investors before the NASD for two years. Prior to that, I served as Attorney General for the State of Utah for eight years.
One of the great challenges of my work is convince our clients that they, as investors, will be treated fairly by the organization that many feel is the trade group for the brokerage houses. If investors have no confidence in the arbitration process, then eventually it must be eliminated.
When a client asks me, as they inevitably do, why one of the three judges on his or her case is a representative of a securities firm, I have never had a good answer. I consider it an outrage. Imagine a jury in a medical malpractice case where one third of the jury members are doctors.
Further, I have never heard of a result where the industry arbitrator did not side with the Respondent if at least one other arbitrator did. If they were truly independent, that would occur from time to time. Public arbitrators often dissent in favor of the Claimant or the Respondent. Industry arbitrators only dissent in favor of Respondents.

It is time for the NASD to clean the slate: all members of the adjudicative panel must be free of conflicting associations. Period.
This unfairness will continue to undermine the process; at the very least it has the undeniable appearance of bias. At most, it is the formalization of bias.
Either way, it has no place in NASD dispute resolution.
Thank you.

Jan Graham
Graham Law Offices
150 S. 600 East Suite 5B
Salt Lake City, UT 84102