Mutual Fund Investor Not a Customer of Affiliated Broker-Dealer
Richmond, Virginia (February 4, 2013): The Fourth Circuit Court of Appeals today affirmed a ruling by the United States District Court for the District of Maryland, finding that a mutual fund investor who purchased fund shares through an unaffiliated broker-dealer on the open market was not a “customer” of the fund’s affiliated broker-dealer. The Fourth Circuit held that, because the investor was not a “customer” under FINRA Rule 12200, the investor had no right under FINRA rules to arbitrate. Priscilla Donovan of Donovan & Rainie, LLC was co-counsel in this matter, in which our client first obtained preliminary and permanent injunctions against the non-customer who filed a FINRA arbitration claim.
A copy of the decision, Morgan Keegan & Co., Inc. v. Silverman, can be found at Morgan Keegan & Co. Inc. v Silverman – 706 F3rd 562.
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