United States District Court, S.D. New York
For Manor House Capital, LLC, Petitioner: Christopher Passavia, Joseph Patrick Dever, Jr, LEAD ATTORNEYS, Cozen O'Connor, New York, NY.
For AIG Capital Services, Inc., Intervenor Plaintiff: Michael Anthony Valerio, Natalie Ann Napierala, LEAD ATTORNEYS, Carlton Fields Jorden Burt, P.A., Hartford, CT.
MEMORANDUM DECISION AND ORDER
GEORGE B. DANIELS, United States District Judge.
This case arises out of a May 30, 2014 arbitration award issued by a three-member panel of the Financial Industry Regulatory Authority (" FINRA"). The panel dismissed all claims against Petitioner Manor House Capital, LLC (" Manor House") and Proposed Intervenor AIG Capital Services, Inc. (" AGESC"),  and recommended expungement of all reference of the arbitration from non-party Samuel Jacob's registration record maintained by the Central Registration Depository (" CRD"). Manor House petitions this Court to confirm the arbitration award pursuant to Section 9 of the Federal Arbitration Act (" FAA"). AGESC moves to intervene in this case as a petitioner and seeks to confirm the arbitration award pursuant to Section 9 the FAA. Respondent Robert Pritsker opposes confirmation of the arbitration award.
Manor House's Petition to Confirm Arbitration Award is GRANTED. AGESC's Motion to Intervene is GRANTED, and its Petition to Confirm Arbitration Award is GRANTED.
Manor House and AGESC are securities broker-dealer firms registered with the U.S. Securities and Exchange Commission and FINRA. Manor House's Pet. ¶ 1; AGESC's Pet. ¶ 1. In January of 2008, Respondent Pritsker retained Manor House as the servicing agent for an annuity contract he purchased from AIG Life Insurance Company. Manor House's Pet. ¶ 8. Later that year, Pritsker's annuity contract decreased in value during the 2008 financial crisis. Id. ¶ 10.
On May 10, 2012, Pritsker initiated an arbitration proceeding against Manor House and AGESC, seeking compensation for losses under the annuity contract. Id. ¶ 11. Pritsker alleged several claims against Manor House and AGESC, and requested as relief compensatory damages in the amount of $770, 000, punitive damages, attorneys' fees, costs, and interest, Id.; Ex. Award (" Award") at 2. Manor House and AGESC filed separate Answers and Affirmative Defenses against Pritsker's claims, and requested as relief reasonable attorneys' fees, and costs. Manor House's Pet. ¶ 12; AGESC's Pet. ¶ 10. Manor House also requested expungement of all reference of the arbitration from Samuel Jacobs'--the principal of Manor House--CRD record. Manor House's Pet. ¶ 13.
On April 30, 2014, after convening for fourteen sessions, the panel issued a written order dismissing all claims against Manor House and AGESC. Id. ¶ 18; Award at 3. However, the panel reserved its ruling for the expungement of Mr. Jacobs' CRD record. Award at 3.
On May 30, 2014, the arbitration panel served on all the parties a copy of its order recommending expungement of all reference of the arbitration from Mr. Jacobs' CRD record. Manor House's Pet. ¶ 22; Award at 3. The arbitration panel's Rule 2080 finding was that " [t]he claim, allegation, or information [was] false."  Award at 3. To support its Rule 2080 finding, the panel provided the following brief explanation:
The Panel decided this application based on the proofs presented by the Claimant [Pritsker] at the hearings. This evidence demonstrated that all the trades made by Samuel Jacobs for the Claimant were initiated by the Claimant. No proof was presented that Samuel Jacobs had any influence or involvement in the Claimant's decision to make these trades. To the contrary, the evidence presented by the Claimant demonstrated that the Claimant had already determined what investments to make when he contacted Samuel Jacobs merely to place the orders.
Additionally, the Claimant presented no proof to support his claims of unsuitability or that Samuel Jacobs breached any fiduciary duty or made any misrepresentations to Claimant. No evidence was presented at the hearings that Samuel Jacobs violated any FINRA regulations or any state or federal statute or law.
II. AGESC's Motion to Intervene