Verducci v. Coda, et al.

Rare Federal Decision Denying Arbitration Before FINRA Based on Admittedly Binding Agreement


An opinion by the Hon. Janis L. Sammartino denying a motion to compel arbitration. This decision has been selected for publication in the federal supplement. It is currently reported as Verducci v. Coda, __F.Supp.2d ___, 2010 WL 3058624 (S.D. Cal. Aug. 3, 2010).

Cross Law Group defeated a motion to compel arbitration before the Financial Regulatory Authority, Inc. brought by defendant tax and financial advisors. Cross Law Group represented Plaintiffs in an action for negligence and breach of fiduciary duties against a tax advisor and his financial services company. Defendants argued that because Plaintiffs executed a customer agreement with the securities broker-dealer who assisted Plaintiffs with the purchase of certain securities, the arbitration clause found in that agreement mandated arbitration of all of Plaintiffs’ claims. The Court rejected Defendants’ contentions, agreeing with our clients’ position that because the action stemmed in tax advice, not acquisition of securities, the allegedly negligent advice fell outside of the scope of the arbitration clause.

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Reference Info:Decision | Federal, 9th Circuit, California | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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