private right of action is inferred, we decline to address the other factors when this requirement is so obviously lacking.
As to the second condition, we wish only to point out briefly that plaintiff has not alleged fraud or bad faith with regard to a violation of any specific exchange rule. Rather, plaintiff contends that defendant Smith Barney acted fraudulently and in bad faith in the arbitration proceeding and therefore violated some sort of general prohibition against acting fraudulently and in bad faith. Plaintiff has cited no decision under § 6 that credits such an attenuated argument, and upon reconsideration, we find the position as illogical as we did the first time.
Plaintiff seeks once again to argue that his action arises under the federal securities laws and that the Court therefore has jurisdiction to proceed. This time around, plaintiff contends that the "nexus" to the federal securities laws lies in the fact that the promissory note, (which is the basis of the action), while not itself a security, was used as an incentive to recruit plaintiff to work for Smith Barney, a securities firm.
This cannot be the meaning of the term "arising under"; again, we are prompted to extend plaintiff's reasoning to an apartment lease used as a recruiting incentive, or a new car loan. Would lawsuits stemming from those transactions also arise under the securities laws because Smith Barney is a securities dealer? We think not.
Finally, plaintiff's counsel seeks to have the Court lift the sanctions which we imposed in our first opinion, on the ground that plaintiff was seeking, in good faith, an extension of the law. We decline to do so. We continue to believe that plaintiff's argument is totally without merit or basis in the existing law. Plaintiff's counsel's sincerity and justifiable zeal were taken into account fully when the Court limited the amount of the sanctions to $ 250. Any collateral effects the award of sanctions has on the plaintiff's ability to obtain oral argument on appeal are not of concern to this Court.
We deny defendant's request for further sanctions based on the current motion for reargument. While we would have seriously considered granting such sanctions ordinarily, because we did overstate the current position of the Second Circuit with regard to a private right of action under § 6, sanctioning the plaintiff's counsel would be inappropriate.
Dated: New York, New York
August 18, 1993
Leonard B. Sand
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