The opinion of the court was delivered by: John F. Keenan, United States District Judge:
Before the Court is Defendant Safra National Bank of New York's ("SNB" or "Defendant") motion to compel arbitration or, alternatively, to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons that follow, the motion to compel arbitration is granted; the Court need not reach the issues presented in the motion to dismiss.
A.Filho's Investment Account at SNB
Plaintiff Delio Aloisio Mattos Santos Filho ("Filho" or "Plaintiff") is a citizen of Brazil residing in Rio de Janeiro.
(Compl. ¶ 2). Filho alleges that he was holding Euros in a Portuguese bank account for the purchase of real property in Brazil, but he did not know when the real estate transaction would occur. (Id. ¶ 8). As a result, Filho wanted the money to be readily available to him. (Id.) On July 1, 2002, a representative of SNB visited Filho in Rio de Janeiro and offered him SNB's private banking services. (Id. ¶ 7). Filho agreed to open an account at SNB. He claims that, due to his limited English skills,*fn1 he signed blank account application documents which the SNB representative actually filled out for him. (Id. ¶ 9). On the signature page of the account application, there is a list of special services that account holders may request. (Declaration of Peter Javier ("Javier Decl."), Ex. 3). There are check marks next to Hold Mail, Designated Name Account, and Custody Account services, but Filho alleges that he did not request that SNB hold his mail or provide a designated name account. (Compl. ¶ 13). Filho's account was officially opened on August 1, 2002 under the designated name "Riding." (Id. ¶ 11). Later that month, Filho transferred €160,000 into his new SNB account. (Id. ¶ 18).
SNB's International Banking Terms and Conditions ("IBTC"), as they existed in 2002, provides that:
Through this Agreement you can establish an investment services account. An Investment Account allows you to purchase and sell securities and other investments based on your own investment decisions and instructions. . . . .
You understand and agree that all financial instruments and securities purchased by the Bank for your Investment Account will be selected by you, without recommendation or advice by the Bank and are in no way the obligation of or guaranteed by the Bank and that you alone bear any risk of loss in connection with any financial instruments or securities purchased or sold at your direction for your Investment Account. (Javier Decl., Ex. 1, ¶ 31).
The gravamen of Plaintiff's complaint is that SNB representatives invested his money in inappropriately risky securities without his prior approval. Specifically, Filho alleges that between February 5, 2007 and August 4, 2008, SNB engaged in twelve different unauthorized investment transactions with money held in his account. (Compl. ¶¶ 24-45). Since SNB was holding his mail, Filho purportedly had no knowledge of this account activity.
On the basis of the allegedly unauthorized transactions, Filho brings claims for: (1) breach of contract; (2) breach of fiduciary duty; (3) negligence; (4) gross negligence; (5) negligent supervision; (6) conversion; (7) securities fraud under Rule 10b-5; (8) violation of the Investment Advisors Act of 1940; and (9) common law fraud.
B.SNB Changes the Terms and Conditions to Include an Arbitration Clause
As described above, SNB imposed certain terms and conditions on its accounts. Approximately one inch above the signature line on SNB's account application is an "Acknowledgement" section which states that: "By signing below, you [the applicant] acknowledge that you: have received, understand and agree to the International Banking Terms and Conditions for Accounts [IBTC] provided with this Application with respect to accounts or services you have requested herein . . . [and] understand that the Terms and Conditions are subject to change." (Javier Decl., Ex. 3). ...