Subject: SR-NASD-2007-021

August 6, 2007

Nancy M. Morris, Secretary
U.S. Securities and Exchange Commission
100 F Street NE
Washington, D.C. 20549-9303

RE: SR-NASD-2007-021: Proposed Amendment to Rule 12100(u) of NASD Code

I have represented public investors in NASD arbitrations for many years, and one of the biggest problems that I have seen is the public arbitrator who is conflicted—the typical “wolf in sheep’s clothing”. I am also strongly opposed to a system that has a so-called “industry arbitrator”, a concept that is totally antiquated and unnecessary. However, since this proposed amendment does not address the industry arbitrator, that is an issue for another day.

The NASD proposal to amend Rule 12100(u) will disqualify as public arbitrators professionals who for the last two years receive industry fees exceeding $50,000 annually from matters which involve investor accounts or transactions. I believe that the NASD proposal should be revised to apply the disqualification regardless of the nature of the industry engagement—not merely investor accounts or transactions. A public arbitrator who receives substantial fees from the securities industry should not serve as a public arbitrator regardless of the nature of the work performed. It creates the appearance of bias.

Herb Pounds
Herbert E. Pounds, Jr., P.C.