Opinion ID: 3010745
Heading Depth: 2
Heading Rank: 2

Heading: The Compliance Clause and the Amended NASD Code

Text: On October 1, 1993, the NASD amended its Code of Arbitration Procedure to provide for the arbitration of any dispute, claim or controversy . . . arising out of the employment or termination of employment of associated person(s) with any member . . . NASD Arbitration Code, Rule 10101 (formerly S 1). Nuveen argues that, regardless of whether we conclude that the pre-amendment NASD Code requires arbitration of Seus's employment dispute, we should affirm the district court's order compelling arbitration based on the compliance clause in her Form U-4 and the fact that the NASD Code explicitly provided for the arbitration of employment disputes when she commenced this action. Seus, on the other hand, argues that because the Form U-4 compliance clause did not mention the arbitration clause and was contained in a different paragraph, the compliance clause is reasonably read only to require Seus to conform her behavior, as a securities dealer, to subsequent changes in the NASD rules. 4 Seus's argument contradicts the holding of the vast majority of courts to consider this issue. Most courts have found that the Form U-4 compliance clause obligates a registrant to comply with the NASD Arbitration Code as it existed at the time she filed suit. See, e.g., Cremin v. Merrill Lynch Pierce Fenner & Smith, Inc., 957 F. Supp. 1460, 1475-77 (N.D. Ill. 1997); Schuetz v. CS First Boston Corp., _________________________________________________________________ 4. As noted above, the Form U-4 compliance clause bound Seus to abide by, comply with, and adhere to all the provisions, conditions and covenants of the . . . by-laws and rules and regulations as they may be adopted, changed or amended from time to time . . . . App. at 5 (Form U-4, P 2). 21 No. 96 Civ. 5557, 1997 WL 452392,  (S.D.N.Y. Aug. 8, 1997); Stone v. Pennsylvania Merchant Group, Ltd., 949 F. Supp. 316, 323-24 (E.D. Pa. 1996). We agree. Seus clearly bound herself to comply with amendments to the NASD's rules, including those governing arbitration.