Justia Securities Law Opinion Summaries

Appellant initiated an arbitration against his former investment advisor, Fisher Investments, Inc. During the arbitration, the arbitrator (1) dismissed Appellant's Missouri statutory claims based on the arbitration agreement's Delaware choice-of-law provision, and (2) sua sponte prohibited Appellant from adding a federal securities law claim. Appellant then filed a civil action against Fisher Investments in federal district court, re-alleging the Missouri statutory and federal securities law claims and seeking a declaration that the arbitration agreement was void. The district court dismissed Appellant's claims without prejudice, concluding that Defendant had to complete arbitration before he could pursue remedies in federal court. The Eighth Circuit Court of Appeals affirmed, holding (1) Appellant was challenging an interim ruling and thus the complete arbitration rule applied, and (2) because the complete arbitration rule applied, the district court did not err in deciding that it did not have jurisdiction to adjudicate Defendant's claims. View "Wootten v. Fisher Invs., Inc." on Justia Law

Plaintiff appealed from the dismissal of his claims against two arbitrators who disqualified him from representing a client. The district court concluded that the claims were barred by arbitral immunity. The court held that the district court had subject matter jurisdiction and correctly dismissed the action because the claims were precluded by arbitral immunity. Accordingly, the judgment was affirmed. View "Sacks v. Dietrich, et al." on Justia Law

Appellants brought various claims before Financial Industry Regulatory Authority (FINRA) arbitrators against Ameriprise, a financial-services company, for, inter alia, breach of fiduciary duty, breach of contract, fraud, and negligent misrepresentation related to the decline in value of various financial assets owned by appellants and managed by Ameriprise. Ameriprise answered appellants' FINRA complaint by asserting, principally, that appellants released their claims by operation of a settlement agreement in a class-action agreement suit that had proceeded between 2004 and 2007 in the United States District Court for the Southern District of New York. After FINRA arbitrators denied Ameriprise's motion to stay appellants' arbitration, Ameriprise moved in the district court, in which the class action had been litigated and settled, for an order to enforce the settlement agreement that would enjoin appellants from pressing any of their claims before FINRA arbitrators. The district court concluded that the class settlement barred all of appellants' arbitration claims and therefore granted Ameriprise's motion and ordered appellants to dismiss their FINRA complaint with prejudice. The court held that the district court had the power to enter such an order and that several of appellants' arbitration claims were barred by the 2007 class-action settlement. Therefore, the court affirmed in part. But because the court concluded that appellants' arbitration complaint plead claims that were not, and could not have been, released by the class settlement, the court vacated in part the district court's judgment, and remanded the case for the entry of an order permitting the non-Released claims to proceed in FINRA arbitration. The court dismissed as moot appellants' appeal from the district court's denial of their motion for reconsideration. View "In Re: American Express Finance Advisors Securities Litigation" on Justia Law

UBS appealed the denial of their motion for a preliminary injunction enjoining defendants from proceeding with an arbitration before the Financial Industry Regulatory Authority (FINRA), and alternatively requiring that the arbitration proceed in New York County. In the arbitration, defendants sought damages for UBS's alleged fraud in connection with defendants' issuances of auction rate securities. The court held that defendants were entitled to arbitration because they became UBS's "customer" under FINRA's rules when they undertook to purchase auction services from UBS. The court also held that the enforceability of the forum selection clause was a procedural issue for FINRA arbitrators to address and that the district court lacked jurisdiction to resolve it. View "UBS Financial Servs, Inc. v. West Virginia University Hosp." on Justia Law

This case arose when the SEC brought suit against Stanford Group Company (SGC), along with various other Stanford entities, including Stanford International Bank (SIB), for allegedly perpetrating a massive Ponzi scheme. In this interlocutory appeal, defendants appealed the preliminary injunction that the receiver subsequently obtained against numerous former financial advisors and employees of SGC, freezing the accounts of those individuals pending the outcome of trial. The court held that the district court had the power to decide the motion for preliminary injunction before deciding the motion to compel arbitration; the district court did not abuse its discretion in granting a preliminary injunction; the preliminary injunction was not overbroad; and the district court acted within its power to grant a Texas Uniform Fraudulent Transfer Act (TUFTA), Tex. Bus. & Com. Code Ann. 24.005(a)(1), injunction rather than an attachment; and that the court did not have jurisdiction to rule on the motion to compel arbitration. Accordingly, the court affirmed and remanded the motion to compel arbitration for a ruling in the first instance. View "Janvey v. Alguire, et al." on Justia Law

Petitioner filed an arbitration claim against respondent with the Financial Industry Regulatory Authority ("FINRA") raising federal claims of securities fraud under section 10(b)(5) of the Securities and Exchange Act of 1934 ("SEC"), 15 U.S.C. 78a et seq., and SEC Rule 10b-5, as well as state-law claims. When respondent lost the FINRA arbitration, respondent appealed the arbitration order asserting various improprieties and asked the district court, and now this court, to undo the award. The court upheld confirmation of the award in full after giving careful attention to respondent's arguments and found them to be without merit. The court did hold, however, that the district court's judgment should credit respondent for approximately $75 million that petitioner received in exchange for selling some of the failed auction rate securities at issue and should have reduced respondent's liability for interest accordingly. Therefore, the court vacated the district court's judgment on that point and remanded for modification in light of the partial satisfaction of the award. The court rejected, however, respondent's attempt to alter the award's scheme for distributing interest earned on the securities portfolio.

The court issued an order and amended the opinion replacing [The district court excluded this evidence under its Alternative Dispute Resolution (ADR) Local Rule 6-11, which it read to create a "privilege" for "evidence regarding the details of the parties' negotiations in their mediation."] in lines 20-24, page 4909, with [The district court excluded this evidence under its Alternative Dispute Resolution (ADR) local rule on "confidential information," which it read to create a "privilege" for "evidence regarding the details of the parties' negotiations in their mediation." A local rule, like any court order, can impose a duty of confidentiality as to any aspect of litigation, including mediation. See N.D. Cal. ADR L.R. 6-12(a); see also 28 U.S.C. 652(d).] The petition for rehearing en banc was denied and no further petitions for rehearing or rehearing en banc may be filed.

Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra ("Winklevosses") sought to intervene after a district court entered judgment enforcing the Term Sheet and Settlement Agreement ("Settlement Agreement") signed by Facebook, the Winklevosses, and the Winklevosses' competing social network site, ConnectU, where the Settlement Agreement envisioned that Facebook would acquire all of ConnectU's shares in exchange for cash and a percentage of Facebook's common stock. At issue was whether the Settlement Agreement was enforceable where the Winklevosses claimed that they did not discover the facts that gave rise to their Rule 10b-5 claims under the Securities and Exchange Act of 1934 ("Act") until after they signed the Settlement Agreement's release of claims and whether the releases foreclosed their challenge to the Settlement Agreement where section 29(a) of the Act precluded a mutual release of unknown securities fraud claims arising out of negotiations to settle a pending lawsuit. The court held that the district court correctly concluded that the Settlement Agreement was enforceable and intended to release claims arising out of the settlement negotiations where the release was valid under section 29(a) when the Settlement Agreement was meant to end a dispute between sophisticated parties acting in an adversarial setting that was characteristic of litigation and could not be interpreted as leaving open the door to litigation about the settlement process.