The Supreme Court ruled [June 5, 2017] that claims for disgorgement brought by the SEC are governed by a five-year statute of limitations. The Court’s unanimous opinion in Kokesh v. SEC, No. 16-529, slip op. at 5 (U.S. June 5, 2017) (Sotomayor, J.), held that disgorgement, as it is applied […]
Case Law
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 […]
Qualified Immunity for NASD
Federal Court Finds Immunity for NASD Staff and State Investigators Tretiak v. Del Papa, No. 00-17248, 2001 U.S. App. LEXIS 24738 (9th Cir., 11/13/01). Enforcement Practice/Procedure – Privileges & Immunities (Absolute Immunity; Qualified Immunity) – Representation Issues – Timeliness Issues (Statutes of Limitations). Regulators have qualified immunity against claims based […]
Manifest Disregard of the Law Again
Failure to Provide Citations in Award Explanation Is Not Evidence of Manifest Disregard of the Law BUNZL DISTRIBUTION v. DEWBERRY, No. 00-2325 (8th Cir., 6/11/01): Claims of manifest disregard, based upon an alleged failure to apply applicable law, will not be presumed by an omission to cite the law. The […]
Manifest Disregard Requires Knowledge and Decision to Ignore
Manifest Disregard Means Knowledge of, and Decision to Ignore, the Law Rosenbaum vs. Imperial Capital, LLC and Rich, 2001 US Dist. LEXIS 17577 (D. Md., 10/29/01) Rosenbaum was a customer of Imperial, a broker-dealer. Rich, an RR at Imperial handled the account. In September of 1997, Rich solicited the purchase […]
Arbitrators Decide Disqualification of Counsel Issue
Benasra vs. Mitchell, Silberberg & Knupp, No. B147537 (Cal. App., 2/13/02) The favored mechanism for dealing with disqualification of counsel in an arbitration proceeding must be for the arbitrators to decide the issue. When Plaintiff looked across the arbitration table and saw former counsel representing the other side, he cried […]
Eligibility and Attorney Fee Awards Under Review
Courts accept cases dealing with Eligibility and Attorney Fee Awards ELIGIBILITY AND ATTORNEY FEES UNDER REVIEW: The Florida Supreme Court is reviewing its position on the awarding of attorney fees in arbitration and the effect of the six-year eligibility provision on a litigantÂs claims. Barron Chase v. Moser was accepted […]
Futures Account Agreement Does Not Encompass Claims Relating to Separate Agreement
Crotser vs. Smith Barney & Co., Inc., NO 228226 (Mich. App., 4/30/02) Appealability * Scope of Agreement * Arbitration Agreement * Competing Agreements. A futures account agreement does not encompass claims relating to separate consulting services provided by the FCM. Plaintiff entered into an agreement with a predecessor firm (Hutton) […]
Attorney Fee Provision in Note Works Against Brokerage Firm
BELL & STANTON v. PRUDENTIAL SECURITIES, INC., NASD ID #99-04338 (San Diego, 5/21/01): In California, a provision for attorney fees in a promissory note or agreement is deemed reciprocal, so that both sides can claim such entitlement. In this case, it seems that such a provision worked to the detriment […]
Arbitration Briefs – Procedure Fault is Grounds for Appeal
Failure to Follow Procedure May Be Grounds for Vacatur But only if the moving party preserved its objections during the arbitration process BROOK v. PEAK INTL., No. 01-50339 (5th Cir.., 6/13/02). The underlying arbitration, which Mr. Brook lost, concerned an employment dispute over severance benefits. The Employment Agreement between the […]