SEC Approves Injunctive Relief Rule

New Mechanism for Resolution of Raiding Disputes Approved Rule 10335 makes permanent, with some significant modifications, a formal mechanism for the resolution of raiding disputes, under a NASD Rule approved by the Securities and Exchange Commission. Former Rule 10335, designed as a one-year pilot in 1996 and taken out of […]

Use of “Prior Bad Act” Evidence Causes Reversal of Award

  Prior NASD Disciplinary Proceedings Cannot Be Used at Trial Markowski v. Attel Bank Intl., Ltd., No. 3D98-3336 (Fla. Dist. Ct., 3Dist., 6/14/00): On appeal from a bench trial, Defendant Markowski challenges the judgment below. In this matter, Attel Bank sought to enforce and collect on a promissory note executed […]

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 […]

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 […]

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 […]

Sawtelle Waddell Reed Punitve Damages Reinstated

On Remand, Arbitrators Continue to Award $25 Million in Punitive Damages, Despite Court Decision UPDATE, SAWTELLE v. WADDELL & REED, INC., NASD ID #97-03642 (9/4/03). Incredibly, the three Arbitrators who were directed to reconsider an excessive award of punitive damages have done so and have decided that they were right […]

Outsiders as RICO conspirators

Archives Securities Case Briefs: Outsiders as RICO conspirators Brouwer vs. Raffensperger, Hughes & Co. Brouwer v. Raffensperger, Hughes & Co., 199 F.3d 961 (7th Cir., 1/13/00): This case concerns the limitations under the federal RICO statute on liability of an underwriter and a law firm that assisted in note financings […]

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 […]