Customer Not Beneficiary of Clearing Agreement

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 third-party beneficiary of an agreement between Primeline, a broker-dealer which employed Asif Amenn as a registered representative, and the Defendants.

Amenn, operating a Ponzi scheme, stole money from Plaintiff and was eventually convicted of securities fraud. The Court held, if Plaintiff relied on the clearing agreement to his detriment, it was without liability to Rauscher. In this case, there was no intent to benefit third parties and the agreement states it is not intended to benefit anyone other than the contracting parties. (P. Hoblin) (SAC Ref. No 2000-20-009)

Copyright 2000-2002 Securities Arbitration Commentator, Inc. P.O. Box 112, Maplewood, NJ 07040; t: 973-761-5880 f: 973-761-1504. Materials denoted with a SAC Reference No. (e.g. SAC Ref. No. 99-01-001) are on hand at SAC and may be obtained by calling the Securities Arbitration Commentator, or by email to The Securities Arbitration Commentator is the leading publication for securities arbitration news and information, and maintains the most complete database of arbitration awards availalble anywhere. For more information regarding their services, visit their website at

Need help with a securities law issue? Call New York Securities Lawyer at 212-509-6544 or visit the website. Representing investors and advisers across the country for over 30 years.

Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.