COMES NOW Defendants, by counsel, and pursuant to 9 U.S.C. § 9 files the following Application and Motion to Confirm the Arbitration Award between the parties.
The Plaintiff hereafter will be referred to as "ABP" and the Defendants will hereafter be referred to as the "Bosco Family."
1. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §1332 as this is a controversy between citizens of different states and the amount in controversy exceeds $75,000.00. ABP is incorporated in Florida and has its principal place of business in Virginia. The Bosco Family are Illinois citizens and Trusts based in Illinois with Trustees who are Illinois citizens.
2. This Court has personal jurisdiction over ABP based upon its filing of an Application and Motion to Vacate, the Court Order referenced below, and ABP's submission to (by agreement) and participation in the underlying arbitration in Chicago, Illinois.
3. There is an actual controversy between the parties as to their respective rights and obligations under a certain final FINRA arbitration award entered on May 21, 2013.
4. Venue is proper pursuant to 9 U.S.C. § 9.
5. The allegations and arguments contained in the Response to the Application and Motion to Vacate and its accompanying Memorandum are hereby restated and incorporated herein.
6. Pursuant to 9 U.S.C. § 9, the Bosco Family moves for the confirmation of the final FINRA arbitration award dated May 21, 2013, attached as Exhibit A and incorporated herein. The arbitration award was issued after the parties participated in arbitration hearings in Chicago, Illinois on May 13-16, 2013.
7. As shown by Exhibits 12 and 62 attached to the Memorandum in Response to the Motion to Vacate, ABP was Ordered by a federal Court by final Order (affirmed by the 4th Circuit) to submit all controversies between the parties to binding FINRA arbitration and the parties selected arbitrators, appeared at the hearings and submitted evidence, and are therefore bound by the decision of the arbitration panel.
8. ABP further agreed to arbitrate with the Bosco Family pursuant to the attached Exhibit B which is a Submission Agreement signed on behalf of ABP agreeing to submit the matter in controversy to arbitration and further agreeing that a judgment and any interest due thereon, may be entered upon the arbitration award.
9. ABP has failed to comply with the arbitration award.
10. The Arbitration Award provided that ABP (jointly and severally with other Respondents to the arbitration) were liable to the Bosco Family as follows:
11. Judgment should be entered against ABP for the amounts above with interest accruing at 10% as provided for in the Award.
WHEREFORE, for the foregoing reasons, ABP's Application and Motion to Vacate the arbitration award should be denied, this Application and Motion to Confirm the Award should be granted and the award should be confirmed, the award should be converted into a judgment against ABP, costs and attorney's fees should be imposed upon ABP, and the Court should award such other relief as it deems appropriate.
Customers vs. Member, Terminated Member, Non-Member, and Associated Persons
Louis Bosco, Annette Bosco, The Bosco Family Trust DTD 7/31/96, by its Trustees Louis and Annette Bosco, The Bosco Family Trust DTD 6/25/96, by its Trustees Louis and Annette Bosco, Mary Borowiak, The Mary Borowiak Trust, by its Trustee, Mary Borowiak, Michael Borowiak, Richard Rubel, and Diane Rubel, hereinafter collectively referred to as "Claimants," were represented by W. Scott Greco, Esq., Greco & Greco, P.C., McLean, Virginia.
Community Bankers Securities, LLC ("CBS") was represented by Steven 8. Biss, Esq., Charlottesville, Virginia.
Waterford Investor Services, Inc. ("Waterford") was represented by Dennis J. Kelly, Esq., and Hsiao C. (Mark) Mao, Esq., Dillingham & Murphy, LLP, San Francisco, California until on or about January 17, 2011. After that date, Waterford was represented by Steven 8. Biss, Esq., Charlottesville, Virginia.
AIC, Inc. ("AIC") did not appear.
Nicholas D. Skaltsounis ("Skaltsounis") was represented by Dennis J. Kelly, Esq., and Hsiao C. (Mark) Mao, Esq., Dillingham & Murphy, LLP, San Francisco, California until on or about January 17, 2011. After that date, Skaltsounis appeared pro se.
George J. Gilbert ("Gilbert") initially appeared pro se. At the hearing, Gilbert was represented by Steven 8. Biss, Esq., Charlottesville, Virginia. James Marvin Mitchell did not appear.
The Statement of Claim was filed on or about April 14,2010. The Submission Agreement of Claimant, Louis Bosco, was signed on or about March 30, 2010. The Submission Agreement of Claimant, Annette Bosco, was signed on or about March 30, 2010. The Submission Agreement of Claimant, The Bosco Family Trust DTD 7/31/96, was signed on or about March 30, 2010 by Louis Bosco, Trustee and Annette Bosco, Trustee. The Submission Agreement of Claimant, The Bosco Family Trust DTD 6/25/96, was signed on or about March 30, 2010 by Louis Bosco, Trustee and Annette Bosco, Trustee. The Submission Agreement of Claimant, Mary Borowiak, was signed on or about March 31, 2010. The Submission Agreement of Claimant, The Mary Borowiak Trust, was signed on or about March 31, 2010 by Mary Borowiak, Trustee. The Submission Agreement of Claimant, Michael Borowiak, was signed on or about March 31, 2010. The Submission Agreement of Claimant, Richard Rubel, was signed on or about March 31, 2010. The Submission Agreement of Claimant, Diane Rubel, was signed on or about March 31,2010. On or about April 25, 2011, Claimants filed a Response to CBS's Motion for Sanctions.
The Statement of Answer and Motion for Sanctions was filed by CBS on or about April 4, 2011. The Submission Agreement of CBS was signed on or about November 11, 2010.
The Statement of Answer was filed by Waterford on or about June 15, 2010. Waterford is the successor in interest to CBS. Waterford Investor Services, Inc. changed its name to Allied Beacon Partners, Inc. The Submission Agreement of Allied Beacon Partners, Inc. f/k/a Waterford Investor Services, Inc. was signed on or about May 15, 2013.
Claimants asserted the following causes of action: securities fraud and common law fraud; securities recommended and purchased were unsuitable under Illinois law. Federal law, and FINRA conduct rules; failure to conduct proper due diligence on recommended product; negligence; breach of fiduciary duty; violation of the Illinois Consumer Fraud and Deceptive Practices Act; breach of contract; and firm and controlling person liability. The causes of action related to the recommendation, purchase and investment in private placements in Medical Capital, LLC and Shale Royalties. Claimants alleged that the investments were fraudulent Ponzi schemes and that Respondents failed to conduct proper due diligence, which would have uncovered facts about the true nature of the investments.
Unless specifically admitted in its Answer, CBS denied the allegations made in the Statement of Claim and asserted affirmative defenses. Unless specifically admitted in its Answer, Waterford denied the allegations made in the Statement of Claim and asserted affirmative defenses.
Claimants requested an award in the amount of:
At the close of the hearing. Claimants requested:
CBS requested that the claims asserted against it be dismissed in their entirety and that it be awarded its costs and attorneys' fees. Waterford requested that the claims asserted against it be denied in their entirety and that it be awarded its costs and attorneys' fees.
The Arbitrators acknowledge that they have each read the pleadings and other materials filed by the parties.
On or about September 2,2010, Respondent, Nicholas D. Skaltsounis, filed for bankruptcy under the United States Bankruptcy Code. In accordance with these filings, all claims against Respondent, Nicholas D. Skaltsounis, are indefinitely stayed. Therefore, the Panel made no determination with respect to the claims against Respondent Nicholas D. Skaltsounis.
Respondents, George J. Gilbert and James Marvin Mitchell, did not file with FINRA Dispute Resolution properly executed Submission Agreements but are required to submit to arbitration pursuant to the Code and, having appeared and testified at the hearing are bound by the determination of the Panel on all issues submitted.
Respondent AIC, Inc., is not a member or associated person of FINRA and did not voluntarily submit to arbitration. Therefore, the Panel made no determination with respect to Claimants' claims against Respondent, AIC, Inc.
On or about November 30, 2010, Waterford filed a Motion to Dismiss. On or about December 22, 2010, Claimants filed a Response in Opposition to Waterford's Motion to Dismiss.
On or about January 24, 2011, the Panel conducted a pre-hearing telephone conference regarding Waterford's Motion to Dismiss. During the pre-hearing, Waterford made an oral Motion to Withdraw its Motion to Dismiss. In its Order dated January 24, 2011, the Panel granted Waterford's oral Motion to Withdraw its Motion to Dismiss. On or about February 5, 2013, Claimant filed a Motion to Amend the Pleadings to Reflect Waterford's Name Change to Allied Beacon Partners, Inc. No responses were filed. In its Order dated February 27, 2013, the Panel granted Claimants' Motion to Amend the Pleadings to Reflect Waterford's Name Change to Allied Beacon Partners, Inc. Upon review of the file and the representations made by/on behalf of the Claimants, the undersigned Panel determined that Respondent, James Marvin Mitchell, has been properly served with the Statement of Claim and received due notice of the hearing, and that arbitration of the matter would proceed without said Respondent, James Marvin Mitchell, present, in accordance with the Code of Arbitration Procedure (the "Code").
At the hearing. Service for Default was proven against James Marvin Mitchell who testified via telephone pursuant to subpoena and indicated his knowledge of the proceedings and hearing and waived participation in the hearing other than to testify.
The parties have agreed that the Award in this matter may be executed in counterpart copies or that a handwritten, signed Award may be entered.
After considering the pleadings, the testimony, and the evidence presented at the hearing the Panel has decided in full and final resolution of the issues submitted for determination as follows:
Pursuant to the Code, the following fees are assessed:
FINRA Dispute Resolution will retain the non-refundable filing fee* for each claim:
*The filing fee is made up of a non-refundable and a refundable portion.
Member fees are assessed to each member firm that is a party in these proceedings or to the member firm that employed the associated persons at the time of the events giving rise to the dispute. Accordingly, as parties. Community Bankers Securities, LLC and Allied Beacon Partners, Inc. f/k/a Waterford Investor Services, Inc. are assessed the following:
Adjournments granted during these proceedings:
The Panel has assessed $1,200.00 of the adjournment fees jointly and severally to Allied Beacon Partners, Inc. f/k/a Waterford Investor Services, Inc., Community Bankers Securities, LLC, George J. Gilbert, and James Marvin Mitchell.
The Panel has assessed hearing session fees for each hearing session conducted. A session is any meeting between the parties and the arbitrators, including a pre-hearing conference with the arbitrators, that lasts four (4) hours or less. Fees associated with these proceedings are:
The Panel has assessed $15,750.00 of the hearing session fees jointly and severally to Allied Beacon Partners, Inc. f/k/a Waterford Investor Services, Inc., Community Bankers Securities, LLC, George J. Gilbert, and James Marvin Mitchell.
All balances are payable to FINRA Dispute Resolution and are due upon receipt
