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Trustee Must Arbitrate Claims Against Financial Advisor

October 1, 2013

Authors

Luke Lantta

Trustee Must Arbitrate Claims Against Financial Advisor

October 1, 2013

by: Luke Lantta

We have previously looked at instances where trustees have sought to compel arbitration of claims brought against them.  Today, we take a look at Wells Fargo Advisors, LLC v. Pritchard, a case from Mississippi where a marital trust brought negligent management and conversion claims against its financial services firm and financial advisor.  There was, of course, a client agreement containing an arbitration clause.  The interesting wrinkle was that the incidents giving rise to the complaint arose before the arbitration agreement was signed.  Was this retroactive application of an arbitration clause enforceable?

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Statutes of Limitation and Arbitration

December 2, 2011

Authors

Luke Lantta

Statutes of Limitation and Arbitration

December 2, 2011

by: Luke Lantta

We’ve previously discussed arbitration agreements in a number of contexts, including who should sign them and when courts have enforced them.  While whether to include an arbitration clause in your standard account agreement is a business decision (and you will find people with very strong opinions on both sides of this debate), if you decide to include one you better make sure that your boilerplate is up-to-date.  Especially in Florida and especially as it relates to statutes of limitation.

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Illinois Federal Court Enforces Arbitration Provision In Account Agreement

September 21, 2011

Authors

Luke Lantta

Illinois Federal Court Enforces Arbitration Provision In Account Agreement

September 21, 2011

by: Luke Lantta

If you actually want to forego the courtroom and cast your lot with an arbitrator, incorporating an arbitration provision into your standard client contracts can be an effective tool because these provisions tend to be strictly enforced by courts.  It’s an example of where boilerplate may have some benefits.  Recently, in Hemenway v. Millennium Trust Company, LLC, the United States District Court for the Northern District of Illinois essentially terminated – at least least temporarily – a lawsuit against Millennium Trust Company by enforcing an arbitration agreement contained in a standard client contract.

Edward L. Hemenway”s Roth Individual Retirement Account Agreement and his Traditional Individual Retirement Account Custodial Agreement had an identical and standard arbitration provision which broadly encompassed “disputes between the parties.”

Nevertheless, Hemenway filed a lawsuit in federal court alleging that the money he contributed to his Roth and IRA accounts was lost, that Millennium Trust Company

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Who Should Sign Arbitration Agreements?

August 26, 2011

Authors

Luke Lantta

Who Should Sign Arbitration Agreements?

August 26, 2011

by: Luke Lantta

We are increasingly seeing more agreements between fiduciaries and clients that contain mandatory arbitration provisions.  Typically the agreements are signed by an “authorized representative” of the fiduciary and personally by the client.  But should other persons within the fiduciary’s organization also be signing on to the arbitration provision? 

Although not a fiduciary litigation case, the United States Court of Appeals for the Fifth Circuit decided in DK Joint Venture 1 v. Weyand that a corporation’s CEO and CFO – who were not signatories to their corporation’s arbitration agreements – were not bound to the arbitration agreement simply by virtue of being agents of the corporation.

This decision has some applicability for arbitration agreements between fiduciaries and clients.  Who should sign an arbitration agreement depends on what you’re trying to accomplish with it.

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