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Preis v. Citigroup Global Markets Inc.

United States District Court, S.D. New York

April 8, 2015

ILAN PREIS, Petitioner,
v.
CITIGROUP GLOBAL MARKETS INC., Respondent.

OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge.

Pro se Petitioner Ilan Preis seeks to vacate or modify an April 16, 2014, arbitration award in favor of Respondent Citigroup Global Markets Inc. ("CGMI"). CGMI opposes the Petition and cross-petitions to confirm the award, and seeks to recoup its attorneys' fees and costs. For the reasons set forth below, Preis' Petition to vacate or modify the award is denied, and CGMI's Cross-Petition to confirm the award is granted. CGMI's Petition for attorneys' fees and costs is denied.

I. Background

A. The Arbitration

The underlying arbitration award arises out of Preis' employment with CGMI. Preis accepted CGMI's offer of employment as a Financial Advisor on June 8, 2010. On October 9, 2012, CGMI discharged Preis.

Preis asserted that he was unlawfully discharged for internally reporting various violations of, inter alia, U.S. Securities and Exchange Commission rules and regulations. CGMI denied these allegations. The parties submitted their dispute to the Financial Industry Regulatory Authority, Inc. ("FINRA") for arbitration.

Before the arbitration hearing began, the parties engaged in five months of discovery and participated in two pre-hearing sessions. The arbitration took place in New York before three arbitrators (the "Panel"). The Panel conducted 16 hearing sessions over nine days and heard testimony from ten fact witnesses and one expert witness.

Before opening statements, the Panel addressed Preis' motion to compel additional discovery, which Preis' counsel filed one or two weeks before the hearing. Preis' counsel stated that, if CGMI did not intend to rely on the requested documents, then this motion would be "irrelevant." After CGMI's counsel informed the Panel that CGMI would not rely on the requested documents, the Panel's chairperson ruled that production was unnecessary but could be revisited if circumstances changed. Preis' counsel consented to the ruling.

The Panel issued its decision on April 16, 2014 (the "Award") and denied both Preis' claims and CGMI's counterclaim.

B. The Cross-Petitions to Vacate and to Confirm the Award

On July 17, 2014, proceeding pro se, Preis moved to vacate or modify the Award in New York state court. His Petition cited several exchanges during the arbitration proceeding as evidence of the Panel's bias or misconduct, including (i) the Panel's chairperson asking Preis' expert witness how age would impact the expert's damages calculation; (ii) the Panel's chairperson asking CGMI to conduct voir dire after Preis' counsel offered into evidence an exhibit consisting of approximately 180 text messages; and (iii) an arbitrator disclosing a potential conflict because a potential witness, who ultimately did not testify, had the same last name as the arbitrator's client. Preis' Petition also appears to assert that the Panel manifestly disregarded the law by, inter alia, (i) rendering a decision that is unsupported by the record, (ii) failing to utilize Preis' expert on damages, and (iii) permitting CGMI to provide false evidence and testimony.

On August 8, 2014, CGMI filed a notice of removal. On August 15, 2014, CGMI opposed Preis' Petition and cross-petitioned for confirmation of the arbitration award, and for attorneys' fees and costs.

II. Legal Standard

Preis brings his Petition to vacate or modify the award pursuant to Rule 7511 of New York's Civil Practice Law and Rules ("CPLR"), and CGMI brings its Cross-Petition to confirm the award pursuant to the Federal Arbitration Act ("FAA"). The parties do not address choice of law in their briefing, but there is no ...


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