The opinion of the court was delivered by: Spatt, District Judge.
MEMORANDUM OF DECISION AND ORDER
On January 19, 1999, Howard Greenberg filed a class action on
behalf of purchasers of ML Direct stock against Bear Stearns in
the United States District Court, Southern District of New York,
Greenberg v. Bear Stearns (No. 99 CIV 359[JSM]). On February
9, 1999, additional plaintiffs, in an action entitled Robert
Levitt, et al. v. Bear Stearns (No. 99 CIV 1115[JSM]), filed a
second action for the same class in the United States District
Court, Southern District of New York. The Greenberg and Levitt
plaintiffs are both represented by the Morley & Trager law firm.
On March 1, 1999, the Greenberg and Levitt plaintiffs moved in
the Southern District to be appointed lead plaintiffs for the
class of all persons who purchased ML Direct stock or warrants
through Sterling Foster during the period of September 4, 1996
through December 31, 1996 (the "Class Period").
Prior to a decision being rendered by the Honorable John S.
Martin, Jr., the plaintiffs in the In Re Sterling Foster multi
district litigation (97 CV 189[ADS]), moved to transfer the
Greenberg and Levitt cases to this Court. The Judicial Panel for
Multi District Litigation entered an order effective April 6,
1999 granting the motion to transfer the actions entitled
Greenberg v. Bear Stearns (No. 99 CIV 359[JSM]) and Robert
Levitt, et al. v. Bear Stearns (No. 99 CIV 1115[JSM]) to this
Court. In addition, the cases were given new civil action
numbers as reflected in the caption above. Due to the transfer,
Greenberg and Levitt's motion for lead plaintiffs was never
decided and is now pending before this Court. Also pending
before the Court are the motions filed by defendant Bear Stearns
to dismiss the Greenberg and Levitt complaints.
A. The Motion to Dismiss the Greenberg Complaint
On May 13, 1997, prior to Greenberg filing his class action
complaint in the United States District Court, Southern District
of New York, a Statement of Claim was filed by Greenberg against
Bear Stearns in a National Association of Securities Dealers
("NASD") Arbitration alleging the same fraudulent scheme
involving ML Direct and Bear Stearns. On March 9, 1999, the NASD
dismissed Greenberg's Claim against Bear Stearns.
In Greenberg's opposition to Bear Stearns' motion to dismiss
it is stated:
Defendant Bear Stearns has made a motion in the
Greenberg case to dismiss the class action brought by
Greenberg on the ground that Greenberg cannot be a
class representative until the arbitration award
dismissing his claim is vacated. Plaintiff agrees and
asks that this Court defer consideration of the
motion with respect to the Greenberg class action
until a determination has been made with respect to
the motion to vacate. The motion to vacate has been
fully briefed and has been submitted to the Honorable
John S. Martin in April, 1999. . . . Thus, once the
arbitration award is vacated, Greenberg will then be
entitled to pursue his class action remedies.
On August 23, 1999, Judge Martin denied Greenberg's motion to
vacate the arbitral award and affirmed the decision of the
arbitration panel dismissing the complaint. See Greenberg v.
Bear Stearns & Co., Inc., 99 CV 359(JSM), 1999 WL 642859
(S.D.N.Y. Aug. 23, 1999). Judge Martin found that the arbitral
panel's decision did not "reflect a manifest disregard of the
evidence or the law." Id. at * 2.
It is well settled that the doctrine of res judicata precludes
a party from re-litigating issues that have been previously
decided. Maharaj v. Bankamerica Corp., 128 F.3d 94, 97 (2d
Cir. 1997) (citing Federated Dep't Stores, Inc. v. Moitie,
452 U.S. 394, 101 S.Ct. 2424 ) (other citations omitted). A
decision by an arbitrator is "as binding and conclusive under
the doctrine of res judicata and estoppel as the judgment of a
court." Katz v. Financial Clearing & Servs. Corp., 794 F. Supp. 88,
94 (S.D.N.Y. 1992); American Renaissance Lines, Inc. v.
Saxis S.S. Co., 502 F.2d 674, 679 (2d Cir. 1974).
The unsuccessful claims presented by Greenberg to the
arbitration panel do not differ in any respect to the claims
presently before this Court. Accordingly Bear Stearns' motion to
dismiss the Greenberg complaint must be granted on the ground of
B. The Motion to Dismiss the Levitt Complaint
One of the principal arguments in Bear Stearns' motion to
dismiss the Levitt complaint is that it is barred by the
applicable statute of limitations. As a similar argument was
made in a motion filed on December 20, 1999 on behalf of Bear
Steams in the Rogers v. Sterling Foster & Co., Inc. et al., 97
CV 189(ADS) multi district litigation, the Court will hear oral
argument on the motion to dismiss the Levitt complaint
simultaneously with the numerous motions to dismiss already
filed and to be filed in the near future with respect to the
multi district litigation. Accordingly, the motion to dismiss
the Levitt complaint is denied with leave to renew after the