Subject: File No. SR-FINRA-2010-053
From: Scott R Shewan
Affiliation: Pape Shewan, LLP

November 24, 2010

As an attorney who has represented public investors in the NASD/FINRA arbitration forum for nearly 20 years, I write to express my unqualified support for this rule change.

For many years, investors have felt that the arbitration forum was stacked against them. One of the reasons for this feeling was the mandate that there be a member of the industry on the panel--a circumstance which would never occur in a jury trial. The mandatory industry arbitrator was particularly galling to investors when their case involved an industry-wide scandal the likelihood was that the industry arbitrator, and his or her firm, was engaged in the same conduct which was the subject of the claim. In recent years, the spate of mergers and consolidations have made investors wonder whether an industry arbitrator would dare to be harsh on a firm which might be buying the arbitrator's firm the following week.

While the securities industry has historically justified the presence of a member of the securities industry on the arbitration panel on the grounds that the industry arbitrator would provide needed expertise, this argument is obsolete (if it ever had any validity). Most parties in arbitration now call expert witnesses to testify. Requiring the presence of an industry arbitrator, with his or her own biases, is inappropriate and unfair to the parties.

I am not opposed to industry arbitrators in all cases, and the rule does not eliminate industry arbitrators--just the mandatory industry arbitrator. The proposed rule is consistent with the concept of investor choice, in that the investor may choose whether or not to opt in to the procedure which permits unlimited strikes of industry arbitrators. Even where the investor exercises the option, the parties may choose to rank or strike as many industry arbitrators as they wish.

FINRA is to be applauded for proposing this rule, which will help to reduce the perception of unfairness which investors have felt with the FINRA arbitral forum. I urge the Commission to approve the rule without delay.