Customer Not Beneficiary of Clearing Agreement Hossain vs. Rauscher Pierce Refsnes Hossain v. Rauscher Pierce Refsnes, Inc., Case No. 97-1380 (D. Kan., 5/15/00): A customer of an introducing broker is not a third party beneficiary of a clearing agreement between an introducing and clearing broker. Hossain claimed to be a […]
Arbitration
Securities arbitration refers to the alternative dispute resolution process to resolve claims between broker firms and their customers and employees. FINRA operates the largest arbitration forum in the United States for the resolution of these disputes.
While no one can be forced to give up their rights to a trial in court, virtually all agreements between investors and their stockbrokers include mandatory arbitration agreements, and every registered stockbroker is required to arbitrate their disputes with their customers and firms.
Our site has been providing information regarding securities arbitration since 1995, starting with Overview of the Securities Arbitration Process. We update the site on a regular basis and invite you to explore our commentary and links and to ask questions.
Prefer to talk by phone? Call Mark Astarita at 212-509-6544 with any questions regarding securities law, enforcement and arbitration.
Mistake of Law is Not Disregard of Law
California Court upholds arbitration award Baraban Securities, Inc. v. Viersen & Watts, Case No. CV 00-02931 (WJR) (C.D. Calif., 4/18/00): Baraban alleges manifest disregard of the law in its petition to vacate the underlying NASD Award (NASD ID #97-02538, Portland, OR, 2/23/00), claiming that the claims were encompassed by a […]
SICA Arbitration Report Released
The “News & Updates” Section of the NYSE Arbitration WebSite (www.nyse.com/arbitration) displays the Eleventh Report (2001) of the Securities Industry Conference on Arbitration. SICA periodically releases a Report, which is addressed to the Securities and Exchange Commission, as a way of formally apprising the Commission and the public of its […]
Archives Restrictive Covenant Denied as Overbroad
Not unique employee, no geographic restriction, no injunction. S.G. Cowen Securities Corp. v. Messih, N.Y.L.Jnl., 5/24/00 (S.D. N.Y.): In the spring of 1999, Cowen hired Messih, a California resident, to be its Managing Director of Technology in its San Francisco office. They entered into an employment contract which expired on […]
Selling Away Claimants can compel arbitration
Vestax Securities Corporation vs. McWood, No. 00-1936 (6th Cir., 2/14/02) Agreement to Arbitrate * Arbitration Agreement (SRO Requirement) * Scope of Agreement * Selling Away * SRO Rules * Statutory Definitions (“Customer”) * SRO Rules (NASD Rule 10301). Investors who purchased securities through a broker-dealer’s agents are “customers,” for purposes […]
Court Compels Arbitration by Firm in Selling Away Case
Court Compels Arbitration in Selling Away Case Customer is “customer” of broker, therefore he is a customer of the firm? Summit Brokerage Services, Inc. v. Cooksley, Case No.: CA 02-11137 AO (Fla. Cir. Ct., 15Dist., 11/1/02). Agreement to Arbitrate * SRO Rules (NASD Rule 10301) * Statutory Definitions (“Customer”) * […]
Selling Away Claims Denied in Arbitration
Firm Still Must Pay $32,000 In Forum and Related Fees ROBINSON v. FIRST ALLIED SECURITIES, INC., NASD ID #99-04441 (Pittsburgh, 9/25/01): This “selling away” case involved thirteen separately filed arbitrations that were consolidated for pre-hearing and hearing purposes. By the time of the hearing, the broker had declared bankruptcy, leaving […]
Sawtelle punitive damage award vacated as grossly excessive
Sawtelle Punitive Damage Award Vacated Court vacates punitive damage award on constitutional due process grounds as being arbitrary and excessive, labeling the $25 million dollar punitive damage award at “grossly excessive.” SAWTELLE v. WADDELL & REED, INC., No. 2330 (N.Y. App. Div., 1Dept., 2/11/03). Courts may allow arbitrators to award […]
Utah Court Upholds Award for In House Counsel’s Legal Time.
Attorney Fee Award For In-House Counsel Upheld SOFTSOLUTIONS, INC. V. BRIGHAM YOUNG UNIVERSITY, No. 981481 (Utah Sup. Ct., 5/19/00) Arbitral awards of attorney fees relating to time spent by in-house counsel are appropriate, but should be based on a cost-plus rate, rather than a market-rate formula. The primary issues on […]
Refusal to Grant Adjournment
Third Time is not a charm Whale Securities Co., L.P. v. Godfrey, No. 565 (App. Div., 1Dept., 4/4/00): When SAC summarized the decision below, 10 SAC 9(16), we set out the facts in detail and posed the question: “How would you decide?” The question at hand, whether the Arbitrators engaged […]
