July 12, 2005
I am an attorney who frequently represents customers in NASD securities arbitration. I am writing concerning several sections of the proposed revision of the NASD Code of Arbitration.
Section 12100n--While parties should be given the option of choosing an industry arbitrator, the industry arbitrator should not be mandatory.
Section 12406c--Chair-qualified lists of arbitrators will do more harm than good. In many cities, the NASDs pool of arbitrators already is woefully shallow. Restricting some arbitrators to a chair list will exacerbate that problem. Furthermore, the chair-qualified list likely will become the domain of professional arbitrators, who actively seek appointment but also develop biases and prejudices due to repeated appointment.
Section 12504--Dispositive motions have become the bane of arbitration practice for claimants. There is no basis for any pre-hearing dispositive motion other than motions concerning the eligiblity of parties or eligibility of claims under the six-year rule. The proposed rule will do nothing to probhibit frivolous dispositive motions based upon statutes of limitations arguments or upon the merits; on the contrary, by codifing motion practice, these motions will proliferate.
Section 12512--At a minimum, all parties must be given the opportunity to object to a subpoena before it is issued. Section 23c2 of the Uniform Code, with its 10-day notice provision, should be incorporated into the NASD Code revision. Brokerage firms frequently issue unlawful, overly-broad, attorney-signed subpoenas, which claimant often receives long after issuance, and after the subpoenaed party has produced the subpoenaed documents, making any objection by claimant moot. The Uniform Code provision would help curb this abusive practice.
Thank you for your consideration.
John J. Miller
Law Office of John J. Miller, P.C.
4770 N. Belleview, Suite 202
Kansas City, MO 64116