Subject: File No. SR-NASD-2005-094
From: Scott I. Batterman, Esq.
Affiliation: Clay Chapman Crumpton Iwamura & Pulice

August 30, 2005

The proposed rule change does not go far enough.

By having even one "non-public" arbitrator -- who was previously, and more honestly, labeled the "industry arbitrator" in the past, there are already questions about the fairness of the process. Arbitration is a common means of resolving disputes, but no other industry gets to ensure that one panelist out of three is going to be an advocate for its position, even before the hearing begins.

The non-public, "industry" arbitrators should be eliminated altogether.

If they are not eliminated, then the definition of non-public should be broadened significantly.

For example, the existing public arbitrator definition allows lawyers who represent industry clients to be public arbitrators so long as their industry representation is less than 10% of their firms annual revenues in each of the last 2 years. The NASD proposal leaves this part of the rule unchanged. That is far too low a threshold

Allowing lawyers who represent industry clients to be public arbitrators, regardless of the percentage of their firm business, is unfair to claimants. The prospect of 2 or even all 3 arbitrators having industry associations is unfair on its face and leaves a clear appearance of pro industry bias and prejudice.

Scott I. Batterman, Esq.
Clay Chapman Crumpton Iwamura & Pulice