There is a strong policy favoring arbitration, particularly the arbitration of customer claims against securities broker-dealers. Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 226 (1987) (The Supreme Court has consistently stated that the Federal Arbitration Act “establishes a federal policy favoring arbitration.”)(quoting, Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24 (1983). Arbitration is quick, it is relatively inexpensive, and perhaps most importantly, it provides a forum for the resolution of claims that may otherwise consume scarce judicial resources, (if these matters, particularly arising under the federal securities laws, were heard in federal court).

scales of justice

In federal court, and indeed, in substantially all courts, a defendant may seek to dismiss a lawsuit, for a variety of reasons, including for legal insufficiency, or the failure to state a claim, or at the common law, demurrer, which means that if if we assume the facts and all reasonable inferences therefrom are assumed to be true, there is no legally viable claim.   However, fraud is required to be plead with particularity, and for example, securities fraud must be pled with sufficient facts that provide a strong inference of scienter or the state of mind embracing the intent to deceive or defraud.

In other cases, particularly where a securities broker-dealer is sought to be held responsible for the conduct of its registered representative selling away or engaging in the sale of unapproved investments, promissory notes, a Ponzi scheme, or other extracurricular activities, the securities broker-dealer may wish to be in court where it seek to the case dismissed based upon the lack apparent authority, or that the investor who or should have known that they were not dealing with the broker-dealer.

As one Court has recently observed, “herculean efforts” by securities broker-dealers “to avoid resolution of disputes through arbitration” is not new. Smoothline Ltd. v. N. Am. Foreign Trading Corp., 249 F.3d 147,148 (2d Cir. 2001)(“Arbitration is intended to provide the parties to a dispute with a speedy and relatively inexpensive trial before specialists. Despite this well-recognized fact, courts continue to be confronted with herculean efforts to avoid resolution of disputes through arbitration.”).

However, once the “threshold” question of arbitrability has been raised, it is incumbent on the
party seeking arbitration to seek “judicial determination” by a Court as to whether or not the dispute is arbitrable. See, e.g. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942-45 (1995)(the “question of arbitrability,” is “an issue for judicial determination”); See also, AT&T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649 (1986)(same); Painewebber Inc. v. Hartmann, 921 F.2d 507, 510 (3d Cir.1990)(The Federal Arbitration Act, 9 U.S.C. § 1, et seq. “enables a litigant to invoke the authority of a federal district court in order to force a reluctant party to arbitrate a dispute.”).

Brokerage Firms Are Required To Arbitrate As A Condition of Membership

finra imageFINRA Rules, as a condition of membership, require all stockbrokers and securities broker-dealers to arbitrate disputes with customers. These Rules are “contractual in nature” and are binding on its members. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Georgiadis, 903 F.2d 109, 113 (2d Cir. 1990)(“The rules of a securities exchange are contractual in nature”); Scobee Combs Funeral Home, Inc. v. E.F. Hutton & Co., Inc., 711 F. Supp. 605, 606 (S.D. Fla. 1989); See also Paine, Webber, Jackson & Curtis, Inc. v. Chase Manhattan Bank, N.A., 728 F.2d 577, 580 (2d Cir. 1984) (the arbitration rules of the New York Stock Exchange can be binding on NYSE members); Kidder, Peabody & Co., Inc., v. Zinsmeyer Trusts Partnership, 41 F.3d 861 (2d Cir. 1994)(As a member of the NASD, Kidder is bound to adhere to the organization’s rules and regulations); Drexel Burnham Lambert, Inc. v. Pyles, 701 F. Supp. 217, 220 (N.D. Ga. 1988).

FINRA Rule 12200 provides that:

Parties must arbitrate a dispute under the Code if:

• Arbitration under the Code is either:

(1) Required by a written agreement, or

(2) Requested by the customer; and

The dispute is between a customer and a member or associated person of a member; and The dispute arises in connection with the business activities of the member or the associated person, except disputes involving the insurance business activities of a member that is also an insurance company.

Non-Signatories Can Be Bound By Arbitration Agreements

It is well established that only parties or signatories to an agreement can be bound by an agreement to arbitrate.  However, what about partnerships, the beneficiary of a trust, or even an Estate.

Courts have held that a party may be bound by arbitration even absent a signature on an agreement. Letizia v. Prudential Bache Securities, Inc., 802 F.2d 1185 (9th Cir. 1988)(non-signatory under the broad construction of the agreement, was bound to arbitrate See, e.g., Blashka v. Greenway Capital Corp., 1995 U.S. Dist. LEXIS 15191 at *7 (S.D.N.Y. Oct. 16, 1995); Genesco v. T. Kakiuchi & Co., 815 F.2d 840 (2d Cir. 1987); Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469 (9th Cir. 1991); Stedor Enterprises, Ltd. v. Armtex, Inc., 947 F.2d 727 (4th Cir. 1991); Ziegler v. Whale Securities Co., 786 F.Supp. 739 (N.D. Ill. 1992); Creative Securities v. Bear Stearns & Co., Inc., 671 F. Supp. 961, 963 n.2 (S.D.N.Y. 1987), aff’d, 847 F.2d 834 (2d Cir. 1988); Ocean Industries, Inc. v. Soros Associates Int’l, Inc., 328 F. Supp. 944, 947 (S.D.N.Y 1971); Reed v. Fisher Controls, Inc., 814 F. Supp. 545, 547 (E.D. Tex. 1993).

Judge with Pen

Because of liberal policy of promoting arbitration, if the issue of arbitrability is a doubtful one, all doubts are to be resolved in favor of arbitration. Stateside Machinery Co. v Alperin, 591 F2d 234 (3rd Cir. 1979) (superseded by statute on other grounds as stated in Gold Kist, Inc. v Laurinburg Oil Co., 756 F2d 14 (3rd Cir. 1985);  Hartford Financial Systems, Inc. v. Florida Software Services, Inc. 550 F. Supp. 1079 (D. Me. 1982)(general partners bound to arbitration agreement in which only the partnership entity was the named party and signatory): Letizia v. Prudential Bache Securities, Inc., 802 F.2d 1185 (9th Cir. 1988)(third party held to arbitration agreement); Garfinkel v. Morristown Obstetrics & Gynecology Assoc., 333 N.J. Super. 291 (App. Div. 2000)(individual doctor of medical group had standing to compel arbitration pursuant to contract with professional corporation);  See also, Matthew Farley, Arbitrating with the Non-Signatory, Securities Arbitration 2002, Taking Control of the Process at 565 (PLI 2002)(the commitment to arbitrate with a party includes, within the scope of that obligation, concurrent obligations to arbitrate that dispute with the legal entity’s agents and employees).

Guiliano Law Group

Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.

For more information concerning common claims against stockbrokers and investment professionals, please visit us at



FINRA Arbitration

The litigation of individual and group investor claims against securities broker-dealers and investment professionals adjuducated in arbitration before the Financial Industry Regulatory Authority.

Defective Financial Products

Alternative Investments, Promissory Notes, Structured Products, High Yield Bond Funds, Non-Marketable Real Estate Investment Trusts, Inverse and Leveraged ETFs,  the Failure to Conduct Due Diligence.

Unsuitable Investments

Speculative or High Risk Investment Recommendations, Unsuitable Investment Strategies, Low Priced Securities, Customer Specific Unsuitability, Inappropriate Investment Recommendations.

Stockbroker Misconduct

Breach of Fiduciary Duty, Churing, Unauthorized Trading, Fraud, Stockbroker Theft, Ponzi Schemes, the Sale of Unapprovied investments.

"First Name I Would Mention"

I had questions and sought a consultation regarding what I believed to have been inappropriate treatment by my brokerage firm. He took the time to give me a clear understanding of what was involved and clearly described next steps to resolve the matter. He did this in a concise, complete and friendly manner. Although in the scheme of things my matter was small. From what I have seen, if I ever had need of a securities lawyer or was asked to refer one to a friend, Nicholas would undoubtedly be the first name I would mention.

Keith (Avvo)

I had a problem with a dishonorable Financial Adviser! So I contacted Mr. Guiliano to see what I could do. Nick said I can't very well charge you for something you can do on your own! Then proceeded to tell me what to do. Because of the short amount of time and my untrustworthy financial adviser's not crossing tee's and dotting I's my life's savings is in the process of being transferred into 3 separate accounts. One's that will work best for me. Instead of one account that kept my money out of my reach! You will have a hard time finding a more upstanding Attorney then Mr. Guiliano!

Walter (Avvo)
"Successful in Achieving Results"

I was the one who contacted Nick through his website as my ex-wife had little or no knowledge of investments, and depended completely on the advice of the investment firm. Without specifics I can say that Nick (and his wife) were not only successful in achieving results in the case, but in the process were all that one could expect (and more) as shown in my overall ratings above. I would highly recommend him.

Joe S. (Avvo)
Excellent Attorney!

Nick represented my wife and I in a recent lawsuit. He was the best attorney we have ever used! Communication was great, he kept us updated regularly, he explained everything in great detail, gave us all our options, and most importantly we always felt he represented our best interest throughout the entire process. We would highly recommend Nick!

Brian F. (Avvo)

"One In A Million"

Nicholas is extremely knowledgeable regarding many facets of the sometimes complicated securities business. This comes from his first hand experience in the business prior to his decision to practice law. Nick is also very dedicated to staying abreast of the ever changing environment that is so prevalent in the investment world. Combine that with his drive and determination to get things done and you have one in a million!!!

Anthony S. (Avvo)
"Excellent Expertise In Securities Fraud"
Nick handled a securities fraud case for me. He is an expert in this field. He is extremely responsive with all forms of communication. Very competent and professional.
"Very Good To Work With"

My case was taken on a contingency basis. Even though it lasted about two years, the Guiliano law firm kept in contact with me, continued to research the case and brought it to a successful conclusion. They were very supportive of me in my first such experience and were very good to work with.

"Somebody you want on your side"

Personable and professional, he is the one to go to when investors are defrauded by Brokerage houses and Investment banks. Somebody you want on your side when things go wrong. He takes personal interest in every case and tries his best. Although I could not recover all my losses due to Fed/SEC action which was beyond his control, I would give Mr. Guiliano full marks on every count. He even worked with my accountants to help me write off losses due to fraud.

Ashok N. (Avvo)
"We are so very grateful"

My husband and I were lucky to find Nick after losing a substantial amount of money due to poor investing from a prominent company. He made us feel at ease right away and was always accessible for questions and concerns. Nick and his team were wonderful with gathering up all the pertinent information needed for our case, constantly in contact with us, answering all of our questions, which helped to make the process a lot less stressful. We are so very grateful to have had The Guiliano Law Firm represent us and the fact that they did it on a contingency basis made it possible to follow through. If not for them, we would never have been able to pursue this, financially or emotionally.

Stacey B. (Avvo)
"Man Of Integrity"

Nick is an incredibly decent Atty. He's a man of integrity, fairness, and honesty. You could see that it's wasn't just me who noticed, it was opposing counsel, at the end of the Zoom! I'm completely impressed with Nick and will keep him in my prayers. Thanks again!

"Fights for his clients like a bull dog"

I contacted Nicholas Guiliano for my 90 year old mother, who lives in Oregon to assist her in recovering from an unscrupulous financial manager who talked her into investing in some very high risk and speculative securities to reap high commissions. Mr Guiliano worked very hard to recover what he could for my mother. He is the best and fights for his clients like a bull dog to uphold their rights and protect their interests. I highly recommend Mr Guiliano and his firm when it comes to securities issues.

"Finest Litigation Attorneys"

I have been a Corporate Counsel for over 30 years having worked with Banks and large public companies. Nick is one of the finest litigation attorneys in the country.

Anthony P. (Google Business)
"Best Of The Best"

I have employed Nick Guiliano personally and on behalf of my clients in the past. Nick is absolutely the best securities lawyer in Philly if not the country. The best of the Best!

"Awesome Results"

I would like to take this opportunity to express my sincere congratulations for your awesome results. I want to acknowledge my appreciation and respect for their splendid professionalism and knowledge you have shown in handling the laws (previous and present), for arbitration over fraud litigations.

"More than most lawyers"

Mr. Guiliano is highly accomplished securities lawyer. He helped us secure a wonderful result in case where my husband and I lost almost all our lifesavings. He is also high compassionate, and did more than most lawyers have ever done for us, as he seems that he cares.

Mary S. (Avvo)
"Incredibly Resourceful"

Nick was incredibly resourceful and professional. His understanding of securities and investment fraud is unparalleled. He is indeed connected with all the powers to be , and is able to provide intellectual and cogent insights. He is tenacious in fighting for his clients, and will never relent. I was able to follow his recommendations and am glad I did.

Mark C. (Avvo)
"Superb Representation"

Mr. Guiliano (Nicholas) represented my mother and I in an investment case where it appeared the agent was preying on elderly people and steering them to improper investments to reap commissions. Mr Guilano did an excellent job of preparing the case and representing us. Although the case settled out of court, it was the best outcome expected for several technical reasons out of his control. He always kept us informed and provided sound recommendations. I would not hesitate to recommend Mr. Guiliano for any investment related case.

Bob W. (Avvo)
"Recommend Him Strongly"

I used Mr. Guiliano for a investment fraud case and he did a very good job. I got a good deal of my money back that had been lost due to risky investments I was put into by a prominent company. It was not a really big case, yet Mr. Guiliano was interested and responsive and kept on top of things for me. I would recommend him strongly.

Anne H. (Avvo)
"His Ability And Advice Paid Off"

We called Mr. Guiliano after reading his article in Forbes magazine. Although we though the statue of limitations might have run out on our case, we were thrilled when he took our case. Against the odds, he was able to get a settlement for us. He kept us informed and advised us on the proper course of action. We always felt confident with his ability and advice and it paid off. Highly recommend.

Cris (Avvo)
"Ability To Think Outside The Box"

Nick Guiliano came highly recommended to me and I was very fortunate that he agreed to take my case. His knowledge of the law and his ability to think outside the box amazed me more and more as my case progressed. His aggressive style and total dedication to me and my case gave me the confidence that we were going to prevail and we did. He is one of the few Attorneys that does not finish his work at end of the day. He was always thinking of ways to use his expertise and knowledge on my behalf. On a personal note, he is a very down to earth guy who makes you very comfortable and at ease. He gave me the ability to sleep at night knowing that my case was in his hands. I will always recommend him without any reservations. In my book he is “the Best”

Jerry V. (Avvo)
"Successful in Winning"

Nicholas Guiliano was successful in winning a case against one of the firms where I had invested. I had a safe investment until a young eager stock broker took over my account and slowly kept putting my money in risky stocks, all while I was on disability. Nick was able to get me a portion of my money back within 2 months. He always was available to speak, and very courteous. I am so grateful to have found Nick. Thank you Nick!
Jill I. (Avvo)

"Absolutely Fantastic"

Nick represented me when a stock broker took advantage of the money I had in my portfolio. He did an unbelievable job because most people thought I did not have a leg to stand on. He really knows his field. I am really thankful that I met Nick because he did a phenomenal job. I would highly recommend him.

Theresa S.
"Dependable and Accessible"

Philadelphia has lived up to it's reputation as having the best attorneys in the Country. I had been told I had a problem of having a Hedge Fund investment. He went to a lot of time and trouble to not take my case. What I really appreciate is his work ethic. He was very kind to me not only with the generosity of his time, but with his words of support. No civilian, like myself, wants a lawsuit but if I ever needed one, it is Mr, Guiliano who I would call upon to represent me. He is a good man.

Kathleen (Avvo)


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