Subject: File No. SR-NASD-2005-094
From: Adam S Doner, Esquire

September 19, 2005

There is absolutely no logical reason nor justification for an industry arbitrator to sit on a panel.All it does is creates a damage cap scenario where the industry arb is able to compromise the verdict with the public arbs by keeping the verdict low.That is why statistically the awards are usually at best never more than 50 net out of pocket loss and forget about awarding attorney fees.Further, the industry arb has too much influence on the public arbs, sort of like when a lawyer sits on jury and everyone else defers to his/her opinion. It is wrong when the industry arb can go into deliberation and give his/her so called expert opinion when one or both parties already brought an expert to opine.Industry defense lawyers are totally inappropriate to sit on panels as they have inherent conflicts of interest in that they cant enter a significant award against a firm without fear of losing business now or in the future.The greatest harm to the investor with respect to the arbitration process is this stacked deck of having an industry arb gives the sense of security to the industry that they do not have to negotiate in good faith.They have no fear of getting hit hard as they would have with a jury or possibly with three true public arbs.Why offer fair monies to settle when you cant get hurt too bad with an arbitration award.The elimination of the industry arb would be a good start to at least show a sense of fairness and equality. It is suppose to be a court of equity. The NASD mission is investor protection and market integrity Thank you for allowing us to make comment.