Free Motion for Miscellaneous Relief - District Court of California - California

Case 3:08-cv-03141-WHA

Document 24

Filed 07/03/2008

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GEORGE L. GUERR, CASB No. 158263 FOWLER WHITE BOGGS BANKER P.A. 501 E. Kennedy Blvd., Suite 1700 Tampa, Florida 33602
Tel: (813) 228-7411

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Fax: (813) 229-8313 Email: george.guerraêfowlerwhite.com

Attorney for Defendant DOUGLAS GREEN

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA CIVIL DIVISION
PERSHING LLC,
) CASE NO. CV-08-3141 WHA
) ) ) ) )

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Plaintiff,
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EMERGENCY MOTION FOR DISSOLUTION OF EX-PARTE ORDER GRANTING TRO
AND ORDER TO SHOW CAUSE, AND TO STAY THIS PROCEEDING AND TO COMPEL

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vs.

CROCKER SECURITIES LLC and DOUGLAS GREEN,
Defendants.

) )
) ) )

ARBITRATION

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Defendant, DOUGLAS GREEN ("Mr. Green"), hereby files this Motion for Dissolution
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Of Ex-Parte Order Granting TRO, Order to Show Cause and Expedited Discovery, and to
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Compel Arbitration. This Motion seeks to dissolve this Court's previous Order which precludes
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Mr. Green from expending any monies or other assets held by him in any financial institution,
effectively cutting off any ability to meet his ordinary and daily living expenses.

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Mr. Green also seeks an Order compelling the Plaintiff to arbitrate the subject dispute.
This Motion is based on the following legal grounds:
The pending dispute is subject to mandatory arbitration.
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1.

Mtn for Dissolution Ex-Parte Order 3:08-cv-03141 WHA

Case 3:08-cv-03141-WHA

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2.

The plaintiff cannot satisfy the requirements of Fed. R. Civ. P 65 for the granting

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of temporary restraining orders as well as the substantive prerequisites governing the

equitable remedies pertaining to restraining orders and injunctions.
3.

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The plaintiff cannot demonstrate irreparable injury - a critical element of the

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claim. Specifically, Plaintiff seeks purely the recovery of a debt, and such economic loss
is clearly not considered "irreparable injury." Plaintiff

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has an adequate remedy at law.

4. The subject Order does not expire on its own terms, as required by Fed. R. Civ. P.

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65, and purports to be effective for more than ten days.
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5.

The subject Order also does not require any form of bond or other security as

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required by Fed. R. Civ. P. 65(C).
Points

The subject Motion is further based on the accompanying Memorandum of

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and Authorities, and such other and further documents as may be fied by the paries in
connection with this Motion.

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Dated this 3rd day of July, 2008.

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Respectfully submitted,

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sf George L. Guerra, Esg. George L. Guerra, CBN: 158263
FOWLER WHITE BOGGS BANKER P.A.

P.O. Box 1438
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Tampa, FL 33601

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(813) 229-8313 (813) 228-7411/ Fax No: Email: george.guerraayfowlerwhite.com Attorney for Defendant

Mtn for Dissolution Ex-Parte Order 3:08-cv-03141 WHA

Case 3:08-cv-03141-WHA

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Filed 07/03/2008

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GEORGEL. GUERR, CASB No. 158263
FOWLER WHITE BOGGS BANKER P.A. 501 E. Kennedy Blvd., Suite 1700
Tampa, Florida 33602
Tel: (813) 228-7411

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Fax: (813) 229-8313 Email: george.guerra(ifowlerwhite.com

Attorney for Defendant

6 DOUGLAS GREEN

7 NORTHERN DISTRICT OF CALIFORNIA
CIVIL DIVISION
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UNITED STATES DISTRICT COURT

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PERSHING LLC,

) CASE NO. CV-08-3141 WHA
)

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) MEMORADUM OF POINTS AND
Plaintiff,
vs.

) AUTHORITIES IN SUPPORT OF ) MOTION FOR DISSOLUTION OF EX-

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) PARTE ORDER GRATING TRO AND
) ORDER TO SHOW CAUSE, AND TO ) STAY THIS PROCEEDING AND

CROCKER SECURITIES LLC and DOUGLAS GREEN,
Defendants.

) TO COMPEL ARBITRATION
)

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)

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Memo in Support of

Motion to Dissolve /Stay/Compel Case 3:08-cv-3141 WHA

Case 3:08-cv-03141-WHA

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TABLE OF CONTENTS

2 I. STATEMENT OF ISSUES .............................. ..... .............................................. ................. 1
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A. Whether this Court should dissolve its Ex Parte Order granting the TRO and has no likelihood of success because when: (1) Plaintiff preliminary injunctive relief has an adequate remedy at Mr. Green is not a proper party to the Order, (2) Plaintiff law, and (3) the preliminar injunction was issued in the absence of a bond. ................. 1 B. Whether this Court should stay this proceeding and compel arbitration because the parties are obligated as FINRA member firms and registered persons to arbitrate any
dispute, such as this one, which arises out of the course of

business among them. ........ 1

II. STATEMENT OF RELEVANT FACTS ............................................................................ 1
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III. ARGUMENT......................................................................................................................... 2
A. The Ex Parte Order Should be Dissolved.............................................. ........................... 2 1. Plaintiff has No Likelihood of Success because Mr. Green is not a Proper Party to
the Order .................................................................................................................2
2. The Availability of an Adequate Remedy at Law Precludes Equitable Relief...... 4

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3. This Court Exceeded its Authority by Failing to Require Plaintiff to Post a Bond 5

B. The Order Granting Expedited Discovery is Improper.................................................... 7 C. This Court Should Stay this Proceeding and Compel Arbitration................................... 7
1. The Parties Agreed to Arbitrate This Dispute......................................................... 7 2. This Court Must Stay this Proceeding as Plaintiff is Required to Arbitrate its

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Dispute with Defendant Green................................................................................ 8 3. Plaintiffs Claims Are Within the Scope of the Agreement to Arbitrate................ 9

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IV. CONCLUSION.................................................................................................................... 10

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TABLE OF AUTHORITIES
Page(s)

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3 FEDERAL CASES
4 Aronson v. Dean Witter Reynolds, Inc.

675 F. Supp. 1324 (S.D. Fla. 1987) ;..........................................................................................9
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Barahona-Gomez v. Reno. 167 F.3d 1228 (9th Cir. 1999) ...................................................................................................6
Bender v. A.G. Edwards & Sons, Inc. 971 F.2d 698 (11th Cir. 1992) ...................................................................................................9
Bernardt v. Polygraphic Co. 76 S. Ct. 273 (1956)...................................................................................................................9
Cummings v. Connell 1999 WL 1256772 (E.D. CaL. 1999)......................................................................................5,6

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Dataline Exports, Inc. v. Basic Construction, Inc. 306 F.3d 912 (9th Cir. 2002) .....................................................................................................4

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Dean Witter Reynolds Inc. v. Byrd 470 U.S. 213 (1985)...................................................................................................................9
Dr. Seuss Enters. v. Penguin Books USA, Inc. 109 F.3d 1394 (9th Cir. 1997) ...................................................................................................3

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Gilmer v. Interstate/Johnson Lane Corp. 17 111 S. Ct. 1647 (1991)...............................................................................................................9
18 Grupo Mexicano de Desarollo, S.A. v. Allance Bond Fund, Inc. 119 S. Ct. 1961 (1999)...........................................................................................................4,5
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Jorgensen v. Cassiday 320 F. 3d 906 (9th Cir. 2003) ................................................................................................5, 6
McMahan Sec. Co. v. Forum Capital Markets 35 F.3d 82 (2d Cir. 1994)...........................................................................................................9
Merrll Lynch Commodities, Inc. v. Richa1 Shipping Corp. 581 F. Supp. 933 (S.D.N.Y. 1984).............................................................................................9
Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. 460 U.S. 1 (1983).......................................................................................................................8

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Municipal Energy Agency of

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Mississippi v. Big Rivers Electric Corporation 804 F.2d 338 (5th Cir. 1986) .....................................................................................................9

Perr v. Thomas 482 U.S. 483 (1987)...................................................................................................................8

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Prima Paint Corp. v. Flood & Conklin Manufacturing Co.
87 S. Ct. 1801 (1967).................................................................................................................9

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Pritzker v. Merrll Lynch, Pierce Fenner & Smith, Inc. 7 F.3d 1110 (3d Cir. 1993).........................................................................................................9
Rodriguez de Quijas v. Shears

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on/ American Express, Inc.

490 U.S. 477 (1989)...................................................................................................................9

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Rosen v. Cascade Int1 Inc. 21 F.3d 1520 (11th Cir. 1994) ...................................................................................................4
Shears

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on/American Express, Inc. v. McMahon
107 S. Ct. 2332 (1 987) ....................................................................................................... ........9

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Shears

on/American Express v. McMahon 482 U.S. 220 (1987)...................................................................................................................9

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Southland Corp. v. Keating 465 U.S. 1 (1984).......................................................................................................................8
FEDERAL STATUTES

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9 U.S.C. § 2 (2008) ..........................................................................................................................8

9 U.S.C. § 3 (2008)..................................................................................................................1,8,9
9 U.S.C. § 4 (2008) ......................................................................................................................1,9
Securities Act of 1933, 15 U.S.C. 77a .............................................................................................9

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Securities Exchange Act of 1934, 15 U.S.C. 78a ............................................................................9
OTHER AUTHORITIES

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Fed. R. Civ. P. 7 ...............................................................................................................................1

Fed. R. Civ. P. 65(c) ........................................................................................................................5
FINRA Code of Arbitration Procedure IM-13000(a) ......................................................................2
FINRA Rule 21 10 ............................................................................................................................2
Memo in Support of Motion to Dissolve /Stay/Compel Case 3 :08-cv-3 141 WHA

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Case 3:08-cv-03141-WHA

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1 FINRA Rule 13 100 ...................................................................................................................... 7, 8

2 FINRA Rule 13200(a)..................................................................................................................7, 8
3 FINRA Rule 13804(a)(2) ..............................,..................................................................................2
4 Local Rule 7.1 ..................................................................................................................................1

5 The Arbitrator's Manual.................................................................................................................. 7
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Memo in Support of

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Pursuant to Fed. R. Civ. P. 7, Civil Local Rule 7.1 and the Federal Arbitration Act ("FAA"),

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9 U.S.C. §§ 3 and 4 (2008), Defendant Douglas Green respectfully submits this memorandum in
support of his Motion for Dissolution of

this Court's Ex-Parte Order Granting TRO, Order to Show

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Cause and Expedited Discovery, and to Compel Arbitration.

I. STATEMENT OF ISSUES
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A. Whether this Court should dissolve its Ex Parte Order granting Plaintiff preliminary
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injunctive relief when: (1) Plaintiff

has no likelihood of success because Mr. Green

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is not a proper party to the Order, (2) Plaintiff

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has an adequate remedy at law, and

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(3) a preliminary injunction was issued in the absence of a bond.

B. Whether this Court should stay this proceeding and compel arbitration because the
parties are obligated as FINRA member firms and registered persons to arbitrate any

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dispute, such as this one, which arises out of the course of

business among them.

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II.

STATEMENT OF RELEVANT FACTS
On or about July 1, 2008, at approximately 1 :45 pm, this Honorable Court entered an Ex

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Parte Order (the "Order") effectively freezing the assets of

Douglas Green, an alleged employee of

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co-defendant Crocker Securities which, in tum, is alleged to owe Pershing a margin debt in excess of
$8,000,000. The Order also provides for expedited discovery. The only notice given to Mr. Green

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was by way of a telephone call from the office of Plaintiffs counsel to Mr. Green's assistant in
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Florida where Mr. Green resides.! Upon learning of the TRO application, counsel for Mr. Green

specifically requested copies of all documents fied with the court, and also requested an opportnity

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to be heard in conjunction with any hearing that might be held. However, no moving papers or
supporting documentation were provided until after the hearing had concluded and the Court had
entered its Order.

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III. ARGUMENT
A. The Ex Parte Order Should be Dissolved

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The subject Order is improper because: (1) Plaintiff

has no likelihood of success in that Mr.

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Green is not a proper party to the Order, (2) Plaintiff has an adequate remedy at law, and (3) a
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preliminar injunction could not issue under the facts at bar in the absence of a bond. The Order
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regarding expedited discovery should also be dissolved because it allows the Plaintiffto circumvent the proscription against traditional discovery in the arbitration process under the FINRA rules. Any

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disputes that arse out of the business activities of a member or an associated person are necessarily

subject to FINRA dispute resolution. Plaintiff is attempting to use this forum to utilize discovery
methods otherwise unavailable under the FINRA Code of Arbitration Procedure. Accordingly, after

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this Court dissolves the TRO, this Court should stay this proceeding and order Plaintiff to file its
claims before the arbitration tribunals of FINRA Dispute Resolution as required by its FINRA

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membership2.
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1.
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Plaintiff

has No Likelihood of

Success because Mr. Green is not a Proper

Party to the Order
In order for this Court to issue a preliminary injunction, the moving pary must clearly show

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either: (1) a combination of probable success on the merits and the possibility of irreparable injury,

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or (2) that serious questions are raised and the balance of hardships tips sharply in favor of the
moving party. Dr. Seuss Enters. v. Penguin Books USA, Inc., 109 F.3d 1394, 1397 (9th Cir. 1997).

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2 Failure to abide by FINRA dispute resolution rules constitutes a violation of Rule 2110. See
FINRA Code of Arbitration Procedure IM-13000(a).
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Based on the allegations in the Complaint, Mr. Green is not a proper party to this order. As

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a factual matter, the Complaint specifically describes why Mr. Green is not a proper party to this
Court's Order. Among other things, the Complaint alleges as follows:

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a. The money Plàintiff seeks to recover, was lent to Crocker Securities
(Complaint at Par. 16)

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b. Mr. Green acted exclusively "within the scope of his employment and as

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Crocker's agent" when he committed the acts complained of

by the Plaintiff.

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(Complaint at Par. 20)
c. Pershing credited Crocker Securities' account for the transactions at issue.

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(Complaint at Par. 14)
d. Crocker purportedly reported directly to Pershing regarding the transactions

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at issue. (Complaint at Par. 14)
e. "Crocker was able to book profits for the false trades and transfer those
profits out of its proprietary account maintained with Pershing" (Complaint at
Par. 14 emphasis added)

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f. "Crocker Securities executed a series of matched orders with no real change

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of

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beneficial ownership" (Complaint at Par. 15)

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g. "Pershing leant money in good faith through a margin account to Crocker

Securities" (Complaint at Par. 16 emphasis added)
In point of fact, Pershing had no direct relationship of any kind with Mr. Green. Pershing's

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contractual relationship, extension of credit and margin relationship was exclusively with Crocker
Securities. Notwithstanding Pershing's current claims and bald assertions about Green's liability, the

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factual allegations in the Complaint demonstrate that Mr. Green does not have direct liability under

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any circumstances to Pershing.
2.

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The Availabilty of an Adequate Remedy at Law Precludes Equitable Relief

This Court exceeded its power when it granted the subject injunction. The law is well settled

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that injunctive relief is only proper in the absence of an adequate legal remedy. See Grpo Mexicano

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de Desarollo, S.A. v. Allcance Bond Fund, Inc., 119 S. Ct. 1961 (1999). In Grupo, the Supreme

Cour reversed the Second Circuit and held that "(t)he district court had no authority to issue a
preliminary injunction preventing (the defendants) from disposing of their assets pending

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adjudication of (the plaintiffs) contract claim for money damages." Id. at 1975. In reaching this
conclusion, the Court relied on the "well-established rule" that an unsecured creditor seeking legal

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remedies cannot obtain a preliminar injunction that freezes a debtor's assets in order to ensure the
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availablity of fuds to satisfy a future judgement. Id. at 1968. The Court noted that "before
judgment (or its equivalent) an unsecured creditor has no rights at law or in equity in the property of
his debtor." Id. at 1973. As a result, the majority concluded that the district court exceeded its

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authority in granting the preliminary injunction. Id. at 1975; see also Dataline Exports, Inc. v. Basic
Construction, Inc., 306 F.3d 912 (9th Cir. 2002) (holding that district court lacks authority

to issue a

preliminary injunction that freezes a debtor's assets in cases involving unsecured creditors); Rosen
v. Cascade Int'l Inc., 21 F 3d 1520 (11th Cir. 1994). Here, Plaintiff requested and obtained an order

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freezing Mr. Green's assets despite the fact that Green is not the "debtor" and the harm alleged is
compensable by monetary damages. In fact, the alleged har is clearly quantifiable, as demonstrated

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by the fact that Plaintiff asserts it incurred up to $8.6 milion in damages in its papers.3 Plaintiff
makes the conclusory statement that it "has suffered and wil continue to suffer great and irreparable

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harm for which no adequate remedy at law exists." See Plaintiffs Ex Parte Application for Order
Showing Cause. However, a mere unsupported assertion does not make it so. As evidenced by the
Complaint, if

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Plaintiff succeeds on its claim, its remedy wil be purely in the form of compensatory

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damages. Plaintiff clearly has an adequate remedy at law - quantifiable, compensatory damages., As
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a result, Grupo prevents Plaintiff from obtaining preliminary injunctive relief.

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3.

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This Court Exceeded its Authority by Failig to Require Plaintiff to Post Bond
a

This Court also exceeded its authority by granting the injunction in the absence of the posting
of security. Pursuant to Fed. R. Civ. P. 65(c), a preliminary injunction may not issue unless the

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applicant provides security "(i)n such sum as the court deems proper, for the payment of such costs

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and damages as may be incurred or suffered by any pary who is found to have been wrongfully
enjoined or restrained." Cummings v. Connell, 1999 WL 1256772, *10 (E.D. CaL. 1999). Further,

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"Rule 65( c) is unambiguous and generally, the failure to require a bond before granting preliminary
injunctive relief is reversible error." Id. at * 11 (internal citations omitted).

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The Ninth Circuit, however, has stated that a distrct court has the discretion to dispense with
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the bond requirement if it concludes there is no realistic likelihood of harm to the defendant from

enjoining his or her conduct4. Jorgensen v. Cassiday, 320 F. 3d 906, 919 (9th Cir. 2003) (citing

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3 The Order states, inter alia, that Defendants are restrained and enjoined from "hiding, dissipating,
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secreting or in any way using any

assets at any financial institution in any form up to the amount of
hearng from Mr. Green before entry of

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$8.6 milion."
4 Unfortnately, the Court did not have the benefit of

the

Order. Among other things, this Court's Order prevents Mr. Green from complying with another

Court's Order of alimony payments of $ 1 5,000 due on the first of each month. He is also, by this
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Barahona-Gomez v. Reno, 167 F.3d 1228, 1237 (9th Cir. 1999) (emphasis added). An additional
limited exception to the bond requirement exists in the Ninth Circuit if requiring the security would

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effectively deny access to judicial review. Cummings, 1999 WL 1256772 at *10. Neither ofthe
limited exceptions to the mandatory bond requirement, as adopted by the Ninth Circuit, apply in this

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case. As such, this Court should have required Plaintiff to post a bond before granting preliminar
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injunctive relief and the injunction should be dissolved.
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It is unclear whether this Court considered the likelihood of harm that would result to Mr.

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Green by granting the injunction but indisputably, Mr. Green has and wil suffer harm as a result.
Pursuant to this Court's Order, all of

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Mr. Green's assets are frozen. The order prevents Mr. Green

from expending any money. His only means of living, therefore, presumably comes from the
utilization of credit cards and anyon-hand cash. When his credit card bils become due and owing,

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Mr. Green wil be unable to access any money to pay the bils, and wil thus incur large interest
charges. The amount of harm Mr. Green is incurrng as a result of

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the complete inabilty to access

money, by which he buys food, pays alimony, and pays his mortgages, cannot be overstated. The
cost to Mr. Green, in the event that he is found to be wrongfully enjoined, would be substantial and

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thus, a bond is a necessary safeguard.
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Further, Plaintiff

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has not and cannot demonstrate that posting a bond would "(e)ffectively

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deny Plaintiff access to judicial review." See Cummings, 1999 WL 1256772 at * 11. As asserted in
its Complaint, "Pershing is one ofthe largest securities clearng firms in the United States". Clearly,

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this case does not fall within either of the narrow exceptions that permit a district court to dispense
with the bond requirement. The defendant wil suffer substantial harm if

wrongfully enjoined and

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the Plaintiff wil not be denied judicial review if a bond is required. Therefore, the injunction should
be dissolved.

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B.

The Order Granting Expedited Discovery is Improper

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Plaintiff is improperly using this forum to engage in discovery methods that it would not
otherwise be entitled to utilze in arbitration. Extensive pre-tral discovery permitted in the cours is
not available in securities arbitration proceedings. Otherwise, arbitration would be afficted with the

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same costly and time-consuming discovery procedures that arbitration is designed to avoid, which is
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one of the primary reasons that parties choose arbitration. As clearly set forth in The Arbitrator's
Manual, arbitration is a "quick, fair, and relatively inexpensive method of dispute resolution." The
Arbitrator's Manual at 1. As discussed below, since this matter should be compelled to arbitration,

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Plaintiff should not be permitted to obtain discovery in this forum and thereby circumvent FINRA
rules.
C.

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This Court Should Stay this Proceeding and Compel Arbitration

This Court should stay this proceeding and order Plaintiff to file its claims before the
arbitration tribunal ofFINRA Dispute Resolution. The parties agreed to arbitrate this dispute as a

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condition of their FINRA membership. Plaintiffs claims fall squarely within the scope of the
agreement.

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1.

The Parties Agreed to Arbitrate This Dispute

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Plaintiff

Pershing LLC and Defendant Crocker Securities LLC are registered broker/dealers.

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Defendant Green is an associated person of Crocker Securities LLC as defined under Rule 13100 of

the Code of Arbitration Procedure for Industry Disputes (the "Code"). As a result ofthis association

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with FINRA, the parties agreed to arbitrate all disputes that arise out of their business activities.
Specifically, FINRA Rule 13200(a) provides in relevant part:
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. .. a dispute must be arbitrated under the Code if the dispute arises out ofthe business activities of a member or an associated person and
is between or amoung:
· Members;

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· Members and Associated Persons; or
· Associated Persons.

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See FINRA Rule 1 3200( a) (emphasis added). Accordingly, since this dispute is between members

and an associated person, Pershing has asserted its claims in the wrong forum and this Court must
compel this dispute to arbitration.

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2.
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This Court Must Stay this Proceeding as Plaintiff is Required to
Arbitrate its Dispute with Defendant Green

The Federal Arbitration Act ("FAA"), 9 U.S.C. § 2, declares that agreements to arbitrate
"shall be valid, irrevocable, and enforceable" to the same extent as any contract. The Supreme Court

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has repeatedly held that the FAA creates a "liberal federal policy favoring arbitration agreements,"
and has consistently required that "any doubts concerning the scope of arbitrable issues. . . be

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resolved in favor of arbitration." See Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460
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U.S. 1,24-25 (1983). The Court has broadly

held that the FAA preempts state-law rules forbidding

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arbitration of certain claims: "Congress declared a national policy favoring arbitration and withdrew

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the power of the states to require a judicial forum for the resolution of claims" covered by an
arbitration agreement. See Southland Corp. v. Keating. 465 U.S. 1, 10 (1984); see also Perr v.
Thomas, 482 U.S. 483, 489 (1987).

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To ensure that such agreements are given effect, the FAA directs courts to stay proceedings
whenever suit is brought on an issue "referable to arbitration under an agreement in writing for such
arbitration." 9 U.S.C. § 3. The Supreme Court has unanimously

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held that "the Act leaves no room

for the exercise of discretion," but mandates a stay of all proceedings if an issue before it is arbitrable
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under a written agreement. 9 U.S.C. § 3 (2001); Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213,

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3

218 (1985); Gilmer v. Interstate/Johnson Lane Corp., 111 S. Ct. 1647, 1651 (1991);
Shearson/American Express, Inc. v; McMahon, 107 S. Ct. 2332, 2337 (1987); Dean Witter
Reynolds, Inc., 105 S. Ct. at 1241 (1985); Prima Paint Corp. v. Flood & Conkin Manufacturing

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Co.,

87 S. Ct. 1801, 1804(1967); Bernardt v. Polygraphic Co., 76 S. Ct. 273,274-75 (1956).5
6

In addition, under Section 4 of the FAA, a party aggreved by another's refusal to arbitrate
7
may move to compel arbitration. See 9 U.S.C. § 4. Section 4 of

the FAA requires a court to issue
refuses, neglects, or fails to comply

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an order compelling arbitration when the opposing party

with the

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arbitration provision in the agreement. McMahon, 107 S. Ct. at 2337; Byrd, 105 S. Ct. at 1241 ("(b)y

its terms, the (F ederal Arbitration) Act. . . mandates that. . . courts shall direct the parties to proceed
to arbitration on issues as to which an arbitration agreement has been signed") (emphasis in original);

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Prima Paint Corp., 87 S. Ct. at 1804; Merrll Lynch Commodities, Inc., 581 F. Supp. at 937;
Aronson, 675 F. Supp. at 1325 ("ifthere exists an enforceable Arbitration Agreement, plaintiff and

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defendant, as parties to such an agreement, are required to resolve arbitrable claims in arbitration
proceedings") .

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Therefore, if this Court finds that the claims Plaintiff asserts are within the scope of the
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arbitration agreement, which they clearly are, it must stay the proceedings and order the Plaintiffto
pursue its claims, if at all, through arbitration.

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5 See also McMahan Sec. Co. v. Forum Capital Markets, 35 F.3d 82,85-86 (2d Cir. 1994); Pritzker
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v. Merrll Lynch, Pierce Fenner & Smith, Inc., 7 F.3d 1110, 1114 (3d Cir. 1993); Bender v. A.G.
Edwards & Sons, Inc., 971 F.2d 698,699 (11 th Cir. 1992); Aronson v. Dean Witter Reynolds, Inc.,

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675 F. Supp. 1324, 1325 (S.D. Fla. 1987); Merrll Lynch Commodities, Inc. v. Richal Shipping Corp., 581 F. Supp. 933, 936 (S.D.N.Y. 1984).
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3.

Plaintiff's Claims Are Within the Scope of the Agreement to Arbitrate

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Whether a claim comes within the scope of an arbitration clause is an issue for the courts to decide, and courts wil interpret agreements to arbitrate as broadly as the paries intended. Municipal
Energy Agency of

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Mississippi v. Big Rivers Electric Corporation, 804 F.2d 338,342 (5th Cir. 1986)

(Doubts about scope of arbitration agreement should be resolved in favor of arbitration rather than
6

against it). Claims relating to securities transactions, such as this one, are clearly arbitrable.6
7
In the present case, the parties, as a result of

being members ofFINRA, agreed to submit to

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arbitration all disputes regarding the business activities of a member or associated person. In its
Complaint, Plaintiff contends that Defendants "carefully orchestrated a fraudulent scheme in which

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defendants Crocker Securities and Douglas Green in his capacity as an agent and registered
representative of Crocker Securities, systematically conspired to manipulate the price of securities
traded through Pershing..." See Complaint ir 7. Plaintiff

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fuher contends that "Defendants caused a

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series of fraudulent trades to be placed in different fixed income instruments" and then "reported to

Pershing a series of fraudulent buy and sell transactions." Id. The allegations of Plaintiffs
Complaint arise out of the business activities of

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Pershing and Crocker, and Mr. Greei:'s activities as

an associated person. The broad language ofthe arbitration agreement in this case plainly covers all
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of

Plaintiffs claims.

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iv.

CONCLUSION
For the foregoing reasons, Defendant Green respectfully requests that this Court enter an

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order, in a form substantially similar to the one submitted herewith, granting Defendant's Motion to
6 See ~ Rodriguez de Quijas v. Shears

on/American Express, Inc., 490 U.S. 477 (1989) (claims
on/American

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under Securities Actof1933); Shears

Express v. McMahon, 482 U.S. 220,238 (1987)

(claims under Securities Exchange Act of 1934); Byrd, 470 U.S. at 213 (requiring arbitration of arbitrable claims even where case includes non-arbitrable claims).
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Dissolve the Ex Parte Order Freezing Defendant Green's Assets and Ordering Expedited Discovery,

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Staying this Proceeding, and Compelling Arbitration.

Respectfully submitted,

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s/ George Guerra George Guerra, Esq, CBN 158263 FOWLER WHITE BOGGS BANKER P.A. 501 E. Kennedy Boulevard Tampa, FL 33602-5200
Telephone: 813-228-7411

Fax: 813-229-8313
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GEORGE L. GUERR, CASB No. 158263 FOWLER WHITE BOGGS BANKER P.A. 501 E. Kennedy Blvd., Suite 1700 Florida 33602 Tampa,
Tel: (813) 228-7411

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Fax: (813) 229-8313 Email: george.guerra(0fowlerwhite.com

Attorney for Defendant

6 DOUGLAS GREEN

7 UNITED STATES DISTRICT COURT

8 CIVIL DIVISION
9

NORTHERN DISTRICT OF CALIFORNIA

PERSHING LLC,
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) CASE NO. CV-08-3141 WHA
)

) (PROPOSED) ORDER GRATING
Plaintiff,

) MOTION FOR DISSOLUTION OF EX-

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vs.

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CROCKER SECURITIES LLC and DOUGLAS GREEN,
Defendants.

) ) ) )
)
)

PARTE ORDER GRANTING TRO AND ORDER TO SHOW CAUSE, AND TO STAY THIS PROCEEDING AND TO COMPEL ARBITRATION

)

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17 This cause having come before the Court on Defendant Douglas Green's Motion for
18 Dissolution of the Ex Parte Order Granting TRO and Order to Show Cause, Motion to Stay this

19 Proceeding and to Compel Arbitration, and after being fully advised in the premises,
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IT IS ORDERED that:
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1.

Defendant Green's Motion to Dissolve this Court's July 1, 2008, Ex Pare Order

granting Plaintiffs application for TRO and allowing expedited discovery is GRANTED.

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2.

Defendant Green's Motion to Stay this Proceeding and Compel Arbitration is

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GRANTED. This proceeding is stayed as it relates to Douglas Green pending the
arbitration of Pershing LLC's claims before the Financial Industry Regulatory Authority

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("FINRA"). This Court shall retain jurisdiction over the case to resolve any postarbitration issues.

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ORDERED AND ADJUDGED on this _ day of July, 2008.

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THE HONORABLE WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

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Proposed Order Dissolution Of

Ex Parte Order 3:08-CV-03141 WHA