Oriental Financial Services Corp. et al v. EFM Retirement Plan UAD 12/19/11

Filing 8

MEMORANDUM AND ORDER: Granting 7 "Motion Requesting Order for Confirmation of Arbitration Award." The award rendered by the FINRA Panel of Arbitrators at Docket No. 1, Exh. 1 is CONFIRMED. Expungement shall be made of any and all references to the Arbitration from the CRD records of Mr. Sean Miles Barbosa. Judgment shall be entered accordingly. Signed by Judge Pedro A. Delgado-Hernandez on 8/21/2018. (LMR)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
ORIENTAL FINANCIAL SERVICES
CORP., et al.
Petitioners,
CIVIL NO. 17-2176 (PAD)
v.
EFM RETIREMENT PLAN UAD
12/19/11, et al.
Respondents.

MEMORANDUM AND ORDER
Delgado-Hernández, District Judge.
Petitioners Oriental Financial Services Corp. and Sean Warren Miles Barbosa seek
confirmation of an arbitration award the Financial Industry Regulatory Authority (“FINRA”)
entered in connection with a securities claim that EFM Retirement Plan UAD 12/19/11 submitted
for the benefit of Edwin F. Miranda-Reyes and his wife Richelly Pérez.1 The award recommended
expungement of any and all references to the arbitration from Miles’ record in the Central
Registration Depository (CRD # 2340356).2 For the reasons stated below, the “Motion for
Confirmation of Arbitration Award” (Docket No. 7) is GRANTED and the award CONFIRMED.
I.

BACKGROUND

EFM initiated arbitration proceedings before FINRA against Oriental, Miles and other
parties, complaining of unsuitable recommendations leading to overconcentration (Docket No. 1,

1

In compliance with FINRA Rule 2080(b), FINRA was named as a party in the Petition (Docket No. 1 at ¶ 8). However, in a letter
dated December 14, 2017, FINRA waived the right to be named as a party (Docket No. 5, Exh. 1) and was withdrawn from the
case (Docket No. 6).
2

The Depository contains the registration records of broker-dealer firms and their associated individuals, including their
qualification, employment and disclosure histories, and facilitates the processing of form filings, fingerprint submissions,
qualification exams and continuing education sessions (See, www.finra.org/industry/crd).

Oriental Financial Services Corp. et al v. EFM Retirement Plan UAD 12/19/11
Civil No. 17-2176 (PAD)
Memorandum and Order
Page 2

Exh. 2).3 Oriental and Miles answered the claim, denying liability. Id., Exh. 3. Thereafter, EFM
filed a notice of voluntary dismissal with respect to Miles (id., Exh. 4); Oriental and EFM reached
a Confidential Settlement Agreement (id., Exhibit 1, p. 6); Miles requested expungement (id.,
Exhibit 5), which EFM did not oppose (id., Exhibit 1, p. 6); and the case remained open for the
arbitrators to consider Miles’ request.

Id., Exhibit 1. Following a telephonic hearing, the

Arbitration Panel found no wrongdoing by Miles and accordingly recommended expungement of
references to the arbitration from Miles’ registration records with CRD, subject to confirmation by
a court with competent jurisdiction on the authority of FINRA Rule 2080. Id. at pp. 6-7. This
case ensued.
II.

DISCUSSION

FINRA Rule 2080(a) states that “[m]embers or associated persons seeking to expunge
information from the CRD system arising from disputes with customers must obtain an order from
a court of competent jurisdiction directing such expungement or confirming an arbitration award
containing expungement relief.” To that end, Section 9 of the Federal Arbitration Act (“FAA”), 9
U.S.C. §§ 1-14, provides that an arbitration award can be confirmed by a court with jurisdiction.
Id. at § 9.
Given that the underlying dispute is based on federal securities laws, rules and regulations,
the court has federal question jurisdiction over the Petition. See, Dean Witter Reynolds, Inc. v.
Sánchez-Espada, 959 F.Supp. 73, 76 (D.P.R. 1997)(“because the underlying dispute involves
claims under the Securities and Exchange Act, 15 U.S.C. § 78, the [c]ourt has federal question

3

Oriental is a corporation organized and existing under the laws of Puerto Rico with principal place of business in San Juan, Puerto
Rico. Miles, a resident of Puerto Rico, is currently employed with Oriental. He was the supervisor of the broker who handled
EFM’s brokerage account after BBVA Securities of Puerto Rico, Inc. merged with Oriental, with Oriental as the surviving entity.

Oriental Financial Services Corp. et al v. EFM Retirement Plan UAD 12/19/11
Civil No. 17-2176 (PAD)
Memorandum and Order
Page 3

jurisdiction pursuant to 28 U.S.C. § 1331”). Venue is proper, for a petition to confirm award may
be made in the district in which the award was made. See, Exparte Popular Securities, 2013 WL
12212696 (D.P.R. February 12, 2013)(internal citations omitted)(so noting).
On the merits, no valid reason exists to deny Petitioner’s request. The Petition was served
upon respondents (Docket No. 4); no claim was made against them (Docket No. 1); and they did
not oppose Miles’ request for expungement before FINRA and have not opposed it here.
Consequently, the “Motion for Confirmation of Arbitration Award” (Docket No. 7) is GRANTED
and the award rendered by the FINRA Panel of Arbitrators at Docket No. 1, Exh. 1 is
CONFIRMED. Expungement shall be made of any and all references to the Arbitration from the
CRD records of Mr. Sean Miles Barbosa (CRD # 2340356). Judgment will be entered accordingly.
SO ORDERED.
In San Juan, Puerto Rico, this 21st day of August, 2018.
s/Pedro A. Delgado-Hernández
PEDRO A. DELGADO-HERNÁNDEZ
United States District Judge