Bass v. Citi Global Markets, Inc.

Filing 37

OPINION AND ORDER: For the foregoing reasons, the Petition is DENIED. Because Citi opposed the Petition, see Respondent Mem., Dkt. 24; Kauff Decl., the Court treats its opposition to Petitioner's motion to vacate as a motion to confirm the ar bitration award. See First Cap. Real Est. Invs., L.L.C. v. SDDCO Brokerage Advisors, LLC, 355 F. Supp. 3d 188, 196 (S.D.N.Y. 2019). As the Court's denial of the former implies a grant of the latter, the arbitration award is confirmed. See id. The Clerk of Court is respectfully directed to terminate all open motions and close this case. SO ORDERED. (Signed by Judge Valerie E. Caproni on 3/11/2025) (tg) Transmission to Orders and Judgments Clerk for processing.

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 3/11/2025

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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ROBERT C BASS,
:
:
Petitioner,
:
:
-against:
:
:
CITI GLOBAL MARKETS, INC.,
:
:
Respondent. :
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VALERIE CAPRONI, United States District Judge:

24-CV-4586 (VEC)
OPINION & ORDER

Petitioner Robert C Bass (“Petitioner”) brings this action pursuant to 9 U.S.C. § 10
seeking to vacate an arbitration award in favor of Respondent Citi Global Markets, Inc.
(“Respondent” or “Citi”). In the underlying arbitration, Petitioner alleged that a $1 billion wire
transfer from another bank was supposed to be deposited into his account with Respondent, but
he never received the funds. After a hearing, the arbitrators dismissed Petitioner’s claims.
Petitioner’s Amended Motion to Vacate FINRA Award, Dkt. 7 (“Petition”), argues that the award
should be vacated. For the following reasons, the Petition is DENIED, and the arbitration award
is confirmed.
BACKGROUND
The Court assumes the parties’ familiarity with the background of this case and recites
only the facts necessary to decide the Petition. On May 22, 2023, Petitioner filed a Statement of
Claim before FINRA Dispute Resolution Services. See Petition at 26. 1 In his Statement of
Claim, Petitioner alleged that on May 7, 2019, a $1 billion cash transfer was sent from Deutsche

1

All citations to page numbers in the Petition refer to the page numbers on ECF.

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Bank AG to Petitioner’s Personal Wealth Management account at Citi. Declaration of Adam
Kauff, Dkt. 25 (“Kauff Decl.”), Ex. 1 (“Statement of Claim”), at 3. Petitioner claimed that he
never received the funds. Id. He initiated arbitration against Respondent seeking the $1 billion
that Respondent allegedly received but failed to credit to his account, along with treble punitive
damages and costs. Id. at 3–5; Petition at 27. Respondent denied that it ever received $1 billion
on Petitioner’s behalf. Kauff Decl., Ex. 2, at 1.
During the arbitration, Petitioner filed several motions, all of which were denied. Petition
at 27–29. On October 18, 2023, Respondent moved to dismiss pursuant to Rule 12504 of the
Code of Arbitration Procedure, arguing that the alleged wire transfer never occurred. Id. at 27.
On January 5, 2024, the arbitrators heard oral argument on the motion to dismiss and deferred
ruling until the close of Petitioner’s case in chief. Id. The parties conducted discovery and
proceeded to an evidentiary hearing. Kauff Decl. ¶¶ 9, 13.
After hearing evidence on June 5 and 6, 2024, id. ¶ 13, the arbitrators granted
Respondent’s motion to dismiss, finding that the evidence Petitioner provided regarding the wire
transfer was not genuine. Petition at 29. The award in Respondent’s favor was entered June 10,
2024, dismissing Petitioner’s claims with prejudice and assessing $11,025 in hearing fees against
him. Id. at 30–32. Petitioner initiated this action on June 14, 2024. See Dkt. 1.
DISCUSSION
I.

Petition to Vacate Arbitration Award Standard
There are limited grounds available for a court to vacate an arbitration award owing to

“the strong deference appropriately due arbitral awards and the arbitral process” and the need
“[t]o encourage and support the use of arbitration by consenting parties.” Porzig v. Dresdner,
Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 138–39 (2d Cir. 2007). The Federal Arbitration
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Act describes the few circumstances that will give rise to the vacatur of an arbitral award,
including: (1) “where the award was procured by corruption, fraud, or undue means;” (2) “where
there was evident partiality or corruption in the arbitrators;” (3) “where the arbitrators were
guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown;” or (4)
“where the arbitrators exceeded their powers.” 9 U.S.C. § 10(a). Additionally, the Second
Circuit has recognized that a “court may set aside an arbitration award if it was rendered in
‘manifest disregard of the law.’” Schwartz v. Merrill Lynch & Co., 665 F.3d 444, 451 (2d Cir.
2011) (citation omitted).
Courts are required to “construe pro se pleadings broadly and interpret them ‘to raise the
strongest arguments that they suggest.’” Torres v. Carry, 800 F. Supp. 2d 577, 582 (S.D.N.Y.
2011) (quoting Graham v. Henderson, 89 F.3d 75, 79 (2d Cir. 1996)); see also McCarthy v. Smith
Barney Inc., 58 F. Supp. 2d 288, 292 n.3 (S.D.N.Y. 1999) (applying liberal construction to pro se
party’s petition to vacate an arbitration award).
II.

Petitioner Fails to Establish Any Grounds to Vacate the Arbitration Award
Petitioner raises several grounds for the vacatur of the arbitration award. He argues that

the award was procured by corruption, fraud, or undue means because the case administration
team was replaced nearly a month before the final evidentiary hearing, which the arbitrators
refused to postpone; an insider informed him of improper ex parte communications between
FINRA and Respondent; and a FINRA insider hacked FINRA’s systems to blacklist Petitioner
from using its email system. Petition at 6–8.
To demonstrate an award was procured by corruption, fraud, or undue means, courts in
this District consider whether the party seeking vacatur has shown that (1) the respondent
“engaged in fraudulent activity; (2) the petitioner could not, in the exercise of due diligence,
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have discovered the alleged fraud prior to the award; and (3) the alleged fraud materially related
to an issue in the arbitration.” Luzar Trading, S.A. v. Tradiverse Corp., No. 20-CV-3387
(KMW), 2021 WL 1164041, at *7 (S.D.N.Y. Mar. 25, 2021) (citation omitted). Petitioner’s
allegations center on FINRA’s administrative conduct, and he largely fails to allege any
fraudulent activity by Respondent. To the extent that he argues Respondent engaged in improper
ex parte communications with FINRA, he fails to provide any evidence to substantiate his claim.
Petitioner also argues that the arbitrators were partial towards Respondent or corrupt,
based on an arbitrator’s characterization of him as a “vexatious litigant”; the fact that a witness
for Respondent remained present for an entire hearing; the arbitrators prohibiting his
representative from speaking at the final hearing; and specious allegations that the arbitration
panel was eavesdropping on him in the videoconference “breakout room.” Petition at 8–14.
“[A]n arbitrator is disqualified only when a reasonable person, considering all the
circumstances, would have to conclude that an arbitrator was partial to one side,” and such a
conclusion can be inferred “from objective facts inconsistent with impartiality,” not “based
simply on speculation.” Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co.,
668 F.3d 60, 72 (2d Cir. 2012) (citations omitted). Petitioner provides no credible support for his
speculative claim that the arbitrators eavesdropped on him. Furthermore, none of the
circumstances raised by Petitioner would necessarily lead a reasonable person to conclude that
the arbitrators were partial to Respondent; rather, the decisions about which Petitioner complains
were simply adverse or administrative rulings or reflected the arbitrators’ view of the case based
on the evidence before them. None of those circumstances amounts to bias. See Scandinavian
Reinsurance Co., 668 F.3d at 72, 75; Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL

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Irrevocable Tr., 878 F. Supp. 2d 459, 466 (S.D.N.Y. 2012) (citing Ballantine Books, Inc. v. Cap.
Distrib. Co., 302 F.2d 17, 21 (2d Cir. 1962)).
Petitioner’s claim that the arbitrators engaged in misconduct when they refused to
postpone the final hearing does not support vacatur of the arbitration award. See Petition at 14–
16. It does not appear that Petitioner ever requested to postpone the hearing, Kauff Decl. ¶ 12;
rather, Petitioner argues that “the arbitrators possessed the authority to act on their own
initiative” to do so. Id. at 14. That is, of course, true, but the issue for this Court is whether the
procedure the arbitrators employed “was fundamentally unfair.” Tempo Shain Corp. v. Bertek,
Inc., 120 F.3d 16, 20 (2d Cir. 1997) (citation omitted). Petitioner has provided the Court with
several hours of audio recordings of the two-day final hearing, and he has not identified, nor has
the Court found, any indicia of fundamental unfairness that resulted from the failure of the
arbitrators to sua sponte postpone the hearing.
The arbitrators did not exceed their authority in deferring their decision on Respondent’s
motion to dismiss. FINRA Rule 12504(a) explicitly provides that a motion to dismiss “prior to
the conclusion of a party’s case in chief” is discouraged, and FINRA Rule 12504(b) allows for
such a motion to be filed after the conclusion of the case in chief.
Finally, Petitioner has failed to carry his burden to show that the arbitrators manifestly
disregarded the law. Manifest disregard of the law requires a two-part showing: (1) “whether the
governing law alleged to have been ignored by the arbitrators was well defined, explicit, and
clearly applicable;” and (2) “whether the arbitrator knew about ‘the existence of a clearly
governing legal principle but decided to ignore it or pay no attention to it.’” Jock v. Sterling
Jewelers Inc., 646 F.3d 113, 121 n.1 (2d Cir. 2011) (citation omitted). Even construing the
Petitioner’s arguments broadly, he has failed to identify any clearly defined legal principle that
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the arbitrators ignored. The Petition cites caselaw regarding the requirements to maintain a
private action under the Racketeer Influenced and Corrupt Organizations Act, see Sedima,
S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985), the limitations on the Fifth Amendment privilege
against compulsory self-incrimination when asserted in a representative capacity, see Bellis v.
United States, 417 U.S. 85 (1974), and the due process rights of prisoners in disciplinary
proceedings, see Baxter v. Palmigiano, 425 U.S. 308 (1976); Petition at 19–20. The Petition
does not explain, nor does the Court understand, how any of those authorities pertains to the
arbitration proceedings.
In another case cited by Petitioner, T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., the
Second Circuit held that an arbitrator did not exceed his powers in reconsidering and revising an
award consistent with his interpretation of his reconsideration authority under the relevant rules.
592 F.3d 329, 342–47 (2d Cir. 2010). Petitioner complains that the arbitrators denied his motion
for reconsideration. Petition at 20. Just because an arbitrator has the power under certain
circumstances to reconsider an award does not mean that an arbitrator is always required to
reconsider an award upon a request from the losing party.
Petitioner also takes issue with the arbitrators’ denial of his motion to amend the
statement of claim to add Pershing, LLC (“Pershing”) as a respondent. Id. at 20–22. Petitioner
states that “the claims arise out of the same transaction or occurrence, or series of transactions or
occurrences,” Petition at 20 (cleaned up), apparently tracking the standard for permissive joinder
of parties under Rule 20 of the Federal Rules of Civil Procedure. Petitioner, however, does not
allege that the arbitrators ignored that standard when assessing his motion to amend. Petitioner
filed his motion on May 16, 2024, and did not file a proposed Amended Statement of Claim until
May 22, 2024. Petition at 29. The arbitrators concluded that Petitioner had previously amended
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his Statement of Claim, and there was insufficient time to consider Petitioner’s motion that was
filed on the eve of the final hearing (scheduled for June 5, 2024). Id. at 130. The Court cannot
conclude that the arbitrators manifestly disregarded the law by declining to permit Petitioner to
add Pershing as a respondent practically on the eve of the hearing. See Petition at 29.
CONCLUSION
For the foregoing reasons, the Petition is DENIED. Because Citi opposed the Petition,
see Respondent Mem., Dkt. 24; Kauff Decl., the Court treats its opposition to Petitioner’s motion
to vacate as a motion to confirm the arbitration award. See First Cap. Real Est. Invs., L.L.C. v.
SDDCO Brokerage Advisors, LLC, 355 F. Supp. 3d 188, 196 (S.D.N.Y. 2019). As the Court’s
denial of the former implies a grant of the latter, the arbitration award is confirmed. See id.
The Clerk of Court is respectfully directed to terminate all open motions and close this
case.
SO ORDERED.
_____________________________
VALERIE CAPRONI
United States District Judge

Date: March 11, 2025
New York, New York

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