Broker-Dealer Litigation - Greenberg Traurig LLP

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Banco Indus. De Venezuela C.A., Miami Agency v. De Saad, 68 So.3d 895 (Fla. 2011).
The Supreme Court of Florida held that the respondent, the director of a Venezuelan bank
doing business in Florida, was not entitled to statutory indemnification pursuant to Fla. Stat. §
607.0850 because Florida’s indemnification statute does not apply to foreign corporations. The
respondent sued her former employer, seeking indemnification pursuant to Fla. Stat. § 607.0850
to recover attorneys’ fees and costs incurred in defending herself against criminal charges. The
court held that while the choice-of-law clause in the respondent’s employment contract subjected
her employer to Florida law, it did not change the fact that a foreign corporation is not subject to
the indemnification statute.
The court noted that even if the statute applied to foreign banks, the respondent would not
be entitled to statutory indemnification because she did not satisfy the statutory requirements.
She was prosecuted for her conduct, not on account of her corporate position. The court
determined that even assuming the respondent was prosecuted “by reason of the fact” of being a
corporate officer, she did not “act in good faith” in a manner she reasonably believed to be in the
best interest of the corporation.
Ridley v. Sullivan, 2011 WL 1900156 (Ky. Ct. App. May 20, 2011).
The court held that the appellant had waived his claim for indemnification by his former
employer of damages imposed against him as part of an arbitration proceeding because the issue
was not raised during the arbitration. The appellant had entered into a separation agreement with
the employer (an NASD member). The agreement contained an indemnification provision that
the employer would indemnify against any claim made for conduct in the course of the
appellant’s employment. The appellant’s ex-wife later brought an arbitration claim against him
and the employer, alleging the appellant mismanaged her brokerage accounts among other
things. During the arbitration, the employer asserted that the appellant’s conduct had not been
within the scope of his employment. The arbitration panel awarded judgment in favor of the exwife,
against both the appellant and the employer separately.
The appellant then brought suit to enforce the indemnification provision against the
employer. The trial court denied his motion to compel indemnification. On appeal, he asserted
that his indemnification claim had not yet accrued at the time of the arbitration and that the
agreement was not subject to any arbitration clause. The Court of Appeals rejected these
arguments, finding that the appellant was not permitted to re-litigate the same facts that had been
presented to the arbitration panel.
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