From: John J. Miller [millerlaw@prodigy.net] Sent: Sunday, March 30, 2003 9:59 PM To: rule-comments@sec.gov Cc: HudJD@aol.com Subject: SR-NASD-2002-168 To Whom It May Concern: I am writing in opposition to adoption of SR-NASD-2002-168, which proposes modifications to the system for expungement of information from the CRD system. I am an attorney who represents brokerage firm customers in securities arbitration, and I am a member of the Public Investors Arbitration Bar Association. The proposed rule ultimately will not be used primarily as a shield by brokers against frivolous or defamatory claims; instead, it will be a sword utilized by brokers and firms against customers in arbitration to discourage and punish claimants, and their lawyers, when possible. Arbitration originally was intended to be a simple, inexpensive method for resolution of disputes between brokerage firms and their customers. It has become a full-fledged litigation proceeding for customers, who now face an expensive, prolonged, litigation-style battle against an adversary with superior resources, which is litigating in the forum of its choosing. Brokerage firms and brokers already discourage claimants by routinely filing counterclaims seeking costs and attorneys’ fees for purported frivolous claims. If the proposed rule is adopted, firms and brokers can advise arbitrators that the SEC and NASD specifically have granted arbitrators the authority to determine that claims are frivolous or defamatory, and the threat of arbitrators financially punishing claimants with counterclaim sanctions will become very real, as will the threat that firms sue claimants and their lawyers for malicious prosecution following completion of the arbitration, arguing that the claim was “frivolous” simply because the arbitrators said so. Such findings also expose claimants’ lawyers to suit from their clients who are ordered to pay fees and expenses. This risk is very real because many arbitrators are not lawyers, virtually all have not been judges, and they are not trained in determining when a claim by law is deemed “frivolous”, “fails to state a claim”, or is defamatory. When this expungement finding is requested, arbitrators are not being asked to serve as fact finders in a dispute, as the arbitration system originally was intended; they now are being asked to make specific legal findings for which they have neither the skill nor training. You can be assured that brokers and firms will not use expungement findings solely to cleanse CRDs; they will use the findings as a means of punishing claimants, and of discouraging future claimants. The CRD system is best served by inclusion of information, not be exclusion. If a broker wins in arbitration, why isn’t it enough to so state on his CRD, regardless of the merit of the claim? The losing party in a lawsuit cannot “expunge” the court record. The proposed rule simply adds another litigation-style layer to an arbitration system that now bears little resemblance to what the original proponents of arbitration, and the courts, intended. Please reject this proposed rule. Thank you for your consideration. John J. Miller Law Office of John J. Miller, P.C. 4770 N. Belleview, Suite 220 Kansas City, MO 64116 Phone 816-413-9075 Fax 816-413-9074