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McCrudden v. National Futures Association

United States District Court, S.D. New York

September 8, 2014




Pro se Plaintiff Vincent Patrick McCrudden ("Plaintiff") brings this action against Defendants National Futures Association ("NFA"), U.S. Commodity Futures Trading Commission ("CFTC"), Financial Industry Regulatory Authority ("FINRA"), the National Adjudicatory Council ("NAC"), and individual employees and former employees of the entity defendants (collectively, "Defendants"), asserting claims for violation of Federal antitrust laws, defamation, slander, libel, malicious prosecution, abuse of process, and violation of the Federal Tort Claims Act ("FTCA"). All of the Defendants have moved pursuant to Federal Rule of Civil Procedure 12(b)(1) to dismiss this action for lack of subject matter jurisdiction or pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.[1] This Court has jurisdiction of this action under 28 U.S.C. §1331.

The Court has thoroughly reviewed the submissions of the parties. For the following reasons, the Court grants each Defendant's motion to dismiss Plaintiff's Amended Complaint in its entirety.


The following factual summary is drawn from the Amended Complaint.

In 1995, Plaintiff founded Managed Accounts Asset Management ("MAAM"), which was the General Partner of the Hybrid Fund, LP. (Am. Compl. ¶ 21.) MAAM was registered with the NFA - a congressionally authorized self-regulatory organization for the futures industry. ( Id. ¶ 73.) Plaintiff was also registered with the CFTC, which is a government agency that regulates commodities trading. (See id. ¶ 70.) Plaintiff was indicted for mail fraud in May 2002, but he was acquitted by a jury of all charges in September 2003. ( Id. ¶¶ 32-34.) In 2004, Plaintiff passed his Series 3 Exam for membership with the NFA and the CFTC.[2] ( Id. ¶ 35.) In February 2005, a subcommittee of the NFA denied Plaintiff membership. ( Id. ¶ 37.) A few months later, after a NFA hearing in June 2005, the NFA denied him membership pursuant to section 8a(3)(m) of the Commodity Exchange Act.[3] After he was denied membership, Plaintiff was also ordered to a one-year diversion program from the NFA and CFTC for sending anonymous letters to the CFTC. (See id. ¶ 41.)

On July 12, 2005, Plaintiff appealed his membership denial to the CFTC, and the denial was affirmed on December 28, 2006. ( Id. ¶¶ 42-43.) He then filed an appeal on January 16, 2007, to the Second Circuit, which affirmed the denial of Plaintiff's NFA membership application on February 6, 2008. ( Id. ¶¶ 44-45.) As a result, Plaintiff's FINRA licenses were automatically "disqualified" and he was essentially banned from the financial industry. (Id.) In May 2008, although he was not registered with the NFA and CFTC, Plaintiff began trading with a new fund that he had founded, Hybrid Fund II, LP ("HF II"). (See id. ¶¶ 45-46.)

Plaintiff further alleges that, in May 2008, FINRA lawyers informed him that they were investigating one of his former employers, but they were in fact investigating him. ( Id. ¶ 48.) Later in that same year, FINRA brought an action against Plaintiff concerning a dispute with his previous employer, and FINRA decided to suspend Plaintiff's FINRA membership and fine him. ( Id. ¶¶ 48, 57.) Plaintiff appealed the suspension to the NAC. ( Id. ¶¶ 48, 57.) In October 2010, the NAC affirmed FINRA's decision to suspend Plaintiff's membership and fine him, and it increased the suspension to one year and the fine to $50, 000. ( Id. ¶ 57.)

Separately, in September 2009, the CFTC subpoenaed information about Plaintiff and his funds after he sold HF II. ( Id. ¶¶ 52, 54.) The CFTC then sued Plaintiff in the Eastern District of New York in December 2010. ( Id. ¶ 59.) On January 14, 2011, while the CFTC enforcement action was proceeding, Plaintiff was arrested for violating 18 U.S.C. § 875(c), which prohibits transmitting in interstate or foreign commerce a threat to injure or kill another. Plaintiff later pleaded guilty to the charge. (See id. ¶ 61; see also case no. 11 Cr. 0061, docket entry no. 96. (E.D.N.Y.).) In connection with that case, prosecutors disclosed, as potential evidence, a Facebook group posting offering to pay a bounty on certain NFA officials and employees. (See id. ¶ 62.) Plaintiff was sentenced to twenty-eight months in prison and was released on January 23, 2013. (Am. Compl. ¶¶ 63-64; see also case no. 11 Cr. 0061, docket entry no. 96. (E.D.N.Y.).)

Plaintiff alleges that Defendants colluded against him to deny him membership in the NFA and CFTC and destroy his career, engaged in malicious prosecution, and engaged in abuse of process by bringing multiple enforcement actions against him. (See Am. Compl. ¶¶ 48, 50, 57, 59, 60, 61.) He also alleges that the CFTC defamed him when it published its decision affirming the NFA's denial of his membership application. ( Id. ¶ 43.) He further alleges that the NFA, FINRA, the NAC, and the individual defendants employed by them, published defamatory, or biased, comments and opinions about him. ( Id. ¶¶ 40, 48, VI(a).). He asserts that his guilty plea was "extorted" insofar as he believes that all of the government officials involved in his court and regulatory matters were corrupt.

At some point, Plaintiff filed claims with the CFTC concerning the alleged tortious conduct, including defamation, slander, libel, malicious prosecution, and abuse of process. On February 1, 2013, the CFTC denied each of Plaintiff's FTCA claims in his administrative action against the CFTC. ( Id. ¶ 65.) On October 1, 2013, Plaintiff filed the instant action and, on November 15, 2013, he filed the Amended Complaint. In his Amended Complaint, Plaintiff asserts causes of action against all of the Defendants pursuant to the Federal Tort Claims Act and the federal antitrust laws, seeking over $232 million in damages, as well as injunctive relief.


In their various motions, the Defendants assert that the Court lacks subject matter jurisdiction of Plaintiff's antitrust claims as a matter of law, and that Plaintiff has failed to fulfill the jurisdictional requirements of the FTCA in a timely manner. "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States , 201 F.3d 110, 113 (2d Cir. 2000). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Id . at 113. "When evaluating a motion to dismiss for lack of subject matter jurisdiction, the court accepts all material factual allegations in the complaint as true, but does not draw inferences from the complaint favorable to the plaintiff." Witt v. Village of Mamaroneck, No. 12CV8778, 2014 WL 1327502 at *4 ...

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