From: Avery B. Goodman, Esq.
Sent: August 2, 2005
Subject: File No. SR-NASD-2005-079

I need to correct a prior comment I made on this new rule. On more careful inspection, the provision I objected to, which is listed as "Section 10322 (b)(h)", in the Federal Register notice, appears to be identical with the old section 10322(b) but has been renumbered as 10322 (h). That being said, the provision still should be pointed out as potentially troublesome.

The existence of this vague rule on cost shifting is an example of existing problems with the arbitration system that could and should be rectified. Because it is so vague, this rule potentially disadvantages the party with fewer resources. There needs to be a set guideline witness fee for non-parties, and it needs to be firmly established that employees of parties to the arbitration DO NOT get reimbursement from the opposing party for their time spent testifying. Third parties might include, for example, employees of Lehman Brothers in a case against Smith Barney, or vice versa. A $40 per day witness fee, like that established by federal law, is appropriate for such witnesses. No reimbursement, whatsoever, should be required when one party calls an employee of another party to testify.

Section 10322 "(h)", which is identical to the old 10322(b), needs to be amended. Giving testimony, whether at a civil trial, or an arbitration, is a public duty of a witness, and should never require more than a nominal payment, except in the case of experts specially retained for the job of reviewing a case.

That being said, in my opinion, the new ten day rule, in and of itself, is a positive move, which harmonizes NASD's Rules with prevailing law, and should be approved.


A.B. Goodman Law Firm, Ltd.
Avery B. Goodman, Esq.
419 Canyon Avenue, Suite 300
Fort Collins, CO 80521