Subject: File No. SR-NASD-2006-088
From: Steven B. Caruso, Esq.
Affiliation: Maddox Hargett Caruso, P.C.

September 27, 2006

As an attorney whose practice is exclusively devoted to the representation of public investors in their disputes with members of the financial industry, the language in the proposed rule concerning pre-hearing motions to dismiss is, at best, problematic.

In just the last year, there has been a significant increase in the filing of Motions to Dismiss by brokerage firms and their associated persons. Indeed, at a conference which was held for securities arbitration defense counsel in New York City that I attended just a few months ago, the attendees were encouraged to file a motion to dismiss at the inception of every arbitration proceeding, before the hearing on the merits took place, and at the time of the hearing as well.

Even for investors who are represented by counsel, the responses to motions to dismiss are time consuming, costly and aggravating. But for investors who do not have any legal representation whatsoever, they are not only intimidating, but can serve to foreclose any opportunity to recover a lifetime of savings that have been wiped out entirely.

If the stated purpose of securities arbitration is to create a forum where a customers greivances can be fairly aired, even the existence of a procedure which conceivably could deprive an investor of the opporuntiy to present their case to a panel of presumably impartial arbitrators is inappropriate.

Perhaps most importantly, none of the procedural safeguards that would normally surround a Motion for Summary Judgement in a courthouse exist in the context of an arbitration proceeding. In court, for example, a party is provided with discovery tools such as depositons and interrogatories to uncover facts necessary to prove a claim. In securities arbitration, however, discovery is limited to a document request which all too often is either ignored or abused by the brokerage community. Similarly, in court, the trier of the law is a trained jurist and there is always the procedural safeguard of appellate review whereas, in securities arbitration forums, the arbitrator training is inconsistent and there is no effective appellate review available.

Finally, these disparities suggest that, before the proposed rule is considered by the Commission, the NASD should be required to publicly disclose the statistics which support their prior experiences with motions to dismiss the training materials that will be provided to the arbitrators who will be asked to decide such motions and the reasons why public investors are not being given a corresponding right to file their own motions for summary judgment when there are no material issues of fact or law in their disputes.

Thank you for the opportunity to submit my comments on this proposed rule.