Dear Fellow IBDA & CAIBD Members,

For the first time in NASD history, IBDA in conjunction with the California Association of Independent Broker Dealers is supporting a slate of candidates for the NASD Board of Governors. Our intent is to obtain "fair and appropriate representation" for the NASD Membership, 90%+ of whom are independent/regional small businesses.

On September 29, 1998 Frank Zarb announced "NASD selected" Board candidates with Special Notice to Members 98-80. Mr. Zarb declared the "NASD Nominating Committee has developed a slate of well-qualified candidates." Enclosed were nominee campaign biographies. Their "selections" were made without any input from the Membership. Who do they really represent? The NASD Nominating Committee of six "selected" two of their own committee members for the Board. Who selected the Nominating Committee?

During the last ten years, while the SEC "watched" NASD Membership declined 23%. This occurred at a time of record business incorporations in other industries. The NASD failed to make this information public. They were too busy "dominating and controlling" the agenda by swapping seats or incestuously passing on positions within the same firm. Many small business firms who had done nothing wrong were and are being forced out of the securities industry because of these special agendas. Why does a one day late Year 2000 filing justify a $2500 fine, censure and Internet exposure? The NASD wants to further export this "vision" of regulatory dysfunction to registered investment advisors.

If you do nothing, the NASD "behind closed doors selections" will be elected by default. Their candidates will continue not representing you. The NASD will continue feeding on it's own Membership. You will continue to be bled paying for their out of control expenses. Frank Zarb recently referred to me as his "friend" when addressing the CAIBD. I am not prepared to give him the keys to my office! If you want to continue in business, you need true representation of your choosing. Our nominations will be fair and open minded. They will fight for the Membership! Competition will bring out the best!

One firm, one vote without regard to size! This vote can only be exercised by the firm's designated Executive Representative whose name appears on the label of Notices and ballots. Under NASD rules we must obtain petitions signed by 167 Executive Representatives within forty-five days of the original Notice. We need your firm Executive Representative to immediately complete and sign the enclosed Nominating Petition and fax it with a hard copy original mailed to us no later than Friday, November 6, 1998.

We need your help to make calls, contact others in your network and contribute funds. All contributions will remain confidential.

In order to facilitate this effort, IBDA would like to express appreciation to Robert G. Velez of Millennium Networks, LLC, New York City (212-849-1222), the creator of our new Web site. The address is http://www.IB-DA.org. All election information including the Nominating Petition are available for review and downloading. Please view our site regularly for additional information. Thank you for your continuing support.

Sincerely,

Alan Davidson

President