Broker-Dealer Litigation - Greenberg Traurig LLP

discovery responses was also meritless because his father and the firm produced over 6,000
pages of documents in response to over 250 discovery requests. The court also held that the
arbitral panel did not exceed its authority under the FAA by failing to inform the associate that
he was entitled to a continuance or by issuing a “gag” order that prevented him from
communicating with the media. The court decided that nothing in the record supported vacatur
and affirmed the district court’s decision to confirm the arbitration award.
Aviles v. Charles Schwab & Co., Inc., 435 Fed. Appx. 824 (11th Cir. 2011).
A securities broker resigned from his employment with a broker-dealer. The brokerdealer
brought an arbitration action against the broker, alleging that he was improperly soliciting
the broker-dealer’s clients. The arbitral panel entered an award in favor of the broker-dealer.
The broker filed an action in state court to vacate the award. The broker-dealer removed the case
to federal court and filed a motion to confirm the award. The district court confirmed the award
and the broker appealed. The broker argued that the arbitrators refused to hear material
evidence, refused to postpone the hearing despite sufficient cause shown, rendered an award that
was in manifest disregard of the law, and suffered from bias. In dismissing the broker’s
arguments, the appellate court emphasized the significant discretion that arbitrators have in
conducting an arbitration. The appellate court also ruled that the broker failed to present any
evidence of bias. The broker presented one affidavit allegedly proving bias, but the affidavit did
not indicate that the arbitrator was predisposed to find in favor of the broker-dealer based, for
example, on prior dealings or relationships that required disclosure. Because the broker failed to
present sufficient evidence to support his arguments of vacatur, the appellate court affirmed the
district court’s decision to confirm the award.
Hook v. UBS Fin. Servs., Inc., 2011 WL 1741997 (D. Conn. May 4, 2011)
A financial advisor filed suit to enjoin his former employer from enforcing a promissory
note. The employer moved to compel arbitration based on an arbitration agreement in the
promissory note. The financial advisor argued that the promissory note as a whole was not valid,
and, as such, he should not be bound by the arbitration provision therein. The court disagreed
with the financial advisor, explaining that he failed to adequately challenge the validity of the
arbitration provision by contesting the validity of the contract as a whole. The validity of the
arbitration provision must be specifically challenged. Alternatively, the financial advisor argued
that his claims fell outside the scope of the arbitration provision because the arbitration provision
required the parties to arbitrate any disputes arising from the promissory note. The court held
that even the financial advisor’s claims for conversion and statutory theft, which were based on
the employer’s freezing various accounts after his resignation, were collateral matters that were
encompassed by the promissory note’s broad arbitration provision. The arbitration clause had an
exception for injunctive relief, but the court found this issue to be moot because the financial
advisor’s complaint failed to adequately plead his right to injunctive relief. Accordingly, the
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