By Harry A. Jacobowitz, Esq.***

A broker’s attempt to vacate an unfavorable New York arbitration decision through forum shopping in Colorado and an effectively uncontested vacatur proceeding, got slapped down when the broker tried to persuade a New York State court to force FINRA to allow a “do-over” of the expungement proceeding.

Vincent Jerome Camarda brought a series of arbitrations to expunge various customer complaints recorded against him in FINRA’s Central Registration Depository (“CRD”). Only one of these arbitrations, Camarda v. Ameriprise Financial Services Inc., FINRA No. 18-00748 (New York, NY, Jun. 12, 2019), resulted in a denial of expungement relief. Camarda sued to vacate that Award in a Colorado State court, naming Ameriprise as the only other party. The court granted vacatur upon the stipulation of those two parties, but FINRA refused to recognize the vacatur and Camarda filed the present action to have a New York court “re-vacate” the Award. The Court, in Camarda v. Financial Industry Regulatory Authority, Inc., No. 150032/2021 (N.Y. Sup. Ct., NY Cty., Dec. 7, 2022), grants FINRA’s motion to dismiss.

Too Late to Vacate

The Court cites three grounds for dismissal. First:

“the complaint is time barred. The relief sought by plaintiff is equitable in nature and is, therefore, subject to a six-year statute of limitations (CPLR § 213). The occurrences at issue were filed to plaintiff’s FINRA records in 2003 and 2004; and as plaintiff prays this Court to exercise its equitable authority expunging these occurrences, such relief was required to be sought sometime prior to approximately 2010. Stated simply, plaintiff’s time to seek equitable relief related to the 2003 and 2004 occurrences expired more than a decade ago.”

Missing Indispensable Parties

Secondly:

“Plaintiff now contends that this Colorado stipulation vacating the FINRA award requires that this Court direct FINRA, not a party in that Colorado action, vacate its arbitration award. This Court will do no such thing; it is beyond cavil that, under these circumstances, an out-of-state judgment cannot be binding as against an unnamed indispensable non-party…. Plaintiff’s attempts, in this action, to enforce an out-of-state judgment against a non-party with an indisputable interest in the outcome of said out-of-state action, and without serving notice of that out-of-state proceeding upon said non-party or naming same as a party, is, at a minimum, repugnant to the most basic principles of the rule of law…."

And:

“Thirdly, conspicuously absent from these proceedings is plaintiff’s former employer, the only other party named in the Colorado action and therefore, an indispensable party here.”

A Warning

The Court concludes its discussion of the second ground for dismissal by noting:

“The advancement of such injudicious arguments may indeed be sanctionable …, as arguments proffered must not be complete[ly] devoid of merit; however, the Court declines to impose financial sanctions, at this time” (emphasis added).

The Court’s Order directs plaintiff’s counsel to serve a copy on the justices hearing any other case pending in New York against FINRA, including one with: “identical facts, including a Colorado so-ordered stipulation.” This seems like a thinly veiled threat to impose sanctions in the future if the plaintiff in this case or anyone else attempting any similarly creative procedures doesn’t take the hint.

(*Seems right to us. **Although the Court did not apply FINRA’s six-year eligibility rule for industry disputes, Rule 13206, which the arbitrator could have used as a bar to consideration of the expungement requests denied below, it suggests that New York’s own six-year statute of limitations for equitable proceedings may have similar effect. We wonder whether a New York court might use it as grounds to refuse to confirm an Award expunging occurrences in a late-filed arbitration. ***This Squib was prepared by Harry A. Jacobowitz, President of HAJ Research and Writing LLC. Mr. Jacobowitz, a member of the Pennsylvania bar, and his firm perform legal research and writing for attorneys and handle substantive searches of SAC’s Award database. He can be contacted at harryjacobowitz@optimum.net.)