]]> Home | Message Board Home Search Arbitration Investors Brokers Finance Law Compliance Archives 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) * Arbitration Agreement * Selling Away.
That an investor never had a brokerage account with a broker-dealer does not preclude his being a customer, for purposes of the NASD Arbitration Code. Michael Cooksley initiated arbitration before the NASD, alleging that SBSs broker sold him fraudulent, unsuitable and unregistered promissory notes issued by 21st Century Satellite Communications. At the time, the broker was an associated person of SBS, but SBS claims that Mr. Cooksley never had a brokerage account with the firm and never signed an arbitration agreement.
NASD Rules can supply the basis for a contract to arbitrate, even in the absence of a bilateral agreement. Moreover, NASD Rule 10301 requires SBS to arbitrate with any customer who demands arbitration. No doubt exists that Mr. Cooksley was a customer of the broker, reasons the Court, and by dealing with Petitioners registered representative, Cooksley became a customer of that firm for purposes of NASD arbitration obligations . Therefore, based upon the foregoing, the Petition to Stay Arbitration is denied and the Motion to Compel Arbitration is granted. (SLA Ref. No. 2002-44-03)
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 firstname.lastname@example.org. 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 www.sacarbitration.com
Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.
Return to The Securities Law Home Page
Visit Beam & Astarita, LLC, securities arbitration, regulation and litigation attorneys