From: JAFINSF@aol.com
Sent: Monday, October 06, 2003 1:57 PM
To: rule-comments@sec.gov
Subject: sr-nasd-98-74

The purpose of this comment is to 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 
in pursuit of claims for almost twelve years and therefore have considerable 
appreciation as to the 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.  
 
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.
 
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.
 
I respectfully request that the rule be rejected.
 
Jeffrey A. Feldman
415-391-5555 (phone)
415-391-8888 (fax)
505 Montgomery Street, 7th Floor
San Francisco, CA 94111

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