From: Al Van Kampen [avk@rohdelaw.com]
Sent: Saturday, October 11, 2003 12:59 AM
To: rule-comments@sec.gov
Subject: SR-NASD-98-74 Rule 3110 amendment

Ladies and Gentlemen:

I oppose the NASD's proposed amendment to Rule 3110[f].  The amendment would
include subsection [f][4][B], allowing enforcement of a choice of law
provision in arbitration. I have represented investors and stockbrokers for
many years and am knowledgeable on the severe impact of this proposal.

The amendment allows brokerage firms located in New York, or which are
defending claims arbitrated with the New York Stock Exchange, or which
involve securities traded in New York, to potentially impose New York law on
citizens of the other 49 states simply by including an apparently innocuous
choice of law clause in a new account agreement that no customer pays
attention to or understands the importance of.  Most of my clients are in
Washington state and have never been to New York.

This is a critical issue to investors with claims in arbitration.  Unlike
most states, the state of New York has not adopted the Uniform Securities
Act; and therefore, if the amendment is adopted, investors from other
jurisdictions may be deprived of the protections afforded by their state
laws.  These include statutory claims for misrepresentation and omission
against all sellers and control persons. While these claims may be available
under federal law, the state laws generally have a longer statute of
limitations and do not allow many of the defenses which have been raised
federally.  The state laws also provide for attorney fees which are not
available under New York law or in federal statutes.  Not only does New York
not have a securities law which can be enforced by investors, there is case
law in New York which may limit investor remedies under the common law.

The point is that investors are entitled to the protections available under
their state laws.  National brokerage firms make the economic decision to
operate in a given state.  They should not then be allowed to sneak a choice
of law clause into a customer agreement that deprives customers of their
rights in their own jurisdiction.  This rule turns the present state of
affairs on its head and permits a brokerage firm to operate in another state
and then dictate that the laws of New York apply to it.  In our state
courts, state law forbids this.  But under the proposed NASD rule, in
arbitrations that customers are forced into, this rule would apply to their
plain and obvious detriment.

The purported objective of the NASD is to protect investors. This proposal
does the opposite.  It protects the industry.  The fact that the proposal
makes the amendment retroactive confirms its anti-investor bias.

The rule is unfair and should be rejected.

Al  Van Kampen
Rohde & Van Kampen PLLC
1000 Second Avenue, Suite 3110
Seattle, WA 98104
Tel:   206/441-1121
Fax: 206/405-2825
avk@rohdelaw.com