it please the court how it interacts for the appellant i'd like to initially focus on the stock picker rule relied upon by the finra panel according to the award the refusal to accept the do h is c med orders on or after july sixteenth and that's an important date and this is a quote was the only argument he peter  sch that would be can make for any recovery against fidelity since the firm may no recommendations to him regarding seem that that's what i've been calling a stock picker rule but that stock picker rule collides directly with second circuit authority i thought the decision of the or british rule was that there was no way that damages could be proved here i thought that was the basis of their decision they were wrong about that  yes and no they they are wrong but i'm not wrong yes they they ruled that there was no causation effectively yes for what happened after july sixteenth yes they ruled that because of that we couldn't prove our expectation damages right what the panel did is then took a period of time which they denominated it as the passive investment period and that was march through june and they said we're not going to even consider that because as they say fidelity was not recommending the shares so they're not that they didn't say they're not going to consider it they considered it and said that it loses because of the stock pick er rule well they sort of did both well now come on i don't know what i want says this is no this is no good because of this rule that's not not considering it that's not saying oh this is beyond our jurisdiction or we don't care about that  we're just not interested or we just forgot that claim i don't need it they made a decision on the merits they made a decision they they made a decision to consider only the fiduciary in contract claims include that that's what the language says after july sixteenth because ice and then they explained why and you're correct that that explanation could be the decision and i'm not going to dispute that the explanation is the stock picker role and you're saying they were wrong as a matter of law i'm saying not only were they wrong as a matter of law i'm saying that rule that was applied manifestly disregarded the manifest disregard means someone said to them here's what the rule is and they didn't just misapply it they said we don't care about that rule we're going to decide our own thing and that's exactly what happened here so with that why is that different when they explained how they applied this rule now that may be right or that may be wrong but they're the arbitrators and they are entitled to be wrong so long as they don't sort of spit me out of the rules ok here the rule is they trust mint and wilson basically holds that you don't have to be a stock picker there can be all sorts of things are entrusted to do at that point what is the thing that they were interest ok from march through june they were entrusted agree to implement the doj is aggressive acquisition campaign of seamen they acquired over forty million shares forty million dollars of stock they they did is they said they would introduce different vehicles for the doj is to acquire the stock not only on the market and off the market and they gave them what they called high tech services so during that period they were fiduciary unquestionably and so there were obligations saying trust them with your entrusted them with the acquisition of the shares with the acquisition of shares off the market with the dark pool obligations and they were encouraged to entrust them in that way because of the and why isn't a fiduciary obligation created by any contract because it's not one thing somebody to perform the contre when they don't perform it then they they were interested to do it but they didn't do it well not all contracts and but the do sherry duties interesting leigh enough if i sell you a car i'm not that trade is not a fiduciary trade but in this case when the deutsche is joint family office promises were made specifically contractual promises promises that were similar to those that fidelity is included in lobbying letters in terms of the way they are created and the promises included client first no conflict institutional trading those are as professor hasan has written about events basically your guys invested in a chinese company incorporated in the cayman islands on the basis of their financial statements in the face of a ton of red flags either on the theory that they didn't believe those red flags or on some kind of theory that somehow other people would be fooled by the way by their aggressive investment into buying into this fly by night company were pretty minds of going to jail and somehow you'd be able to get out first by selling off the stock and what it what is the period out there oh the damages are called here two theories first the prophylactic damage rule which is well settled law in this circuit it stems from judge heart against solomon and that dispenses of the causation requirement with regard to fiduciary i sickly arguing you're arguing this as if it were an appeal from a district court judge that the law was misapplied and that they didn't really do it right in making this this analysis no because in this case in this record is replete with this in this case we articulated these are these standards they were clue early developed for the for this panel the panel or the panel responded when we said you need to apply these standards which would include the prophylactic down the drool so in fact a faceless fiduciary always has to d  the to the to the the arbitrators attention the arbitrator's response was we don't follow precedent and that wasn't a stray remark there was an extensive colloquy i then said to the exact precedent they basically looked at the precedent that we articulated which included that there was a fiduciary relationship that contractual promises including fiduciary like promises were made and they basically turned their back on this circuit and in this case it's sort of it's very similar in some ways to the new york telephone case in that case an arbitrator turned his back on second circuit authority in favor of other circuits authority and he said let them figure it out that that arbitration award was vacated in this case the or betrayed or in the face of all these of this law said basically the same thing we don't have to follow this process precedent you go appeal so essentially what happened in this case is that the arbitrator sensually thumbed his nose at at existing precedent and the particularly the prophylactic damage will for example and that was all cited to him all address to all address and to me to make it which was very carefully thought out and very well reasoned and confirming the award the district court declined the very same invitation that's being extended to the panel today right that is the court below affirmed that its job was not to micromanage the panel but to confirm that it committed briefs as being taken wildly out of context when you look at the briefs and you look at the opinion below arbitrator anderson was specifically inviting mr graef and counsel for the doj has to present whatever legal arguments whatever precedent they believe should apply whatever conditions whatever the legal argument they want to make in their briefs which they did so the very moment that the statement that he's referring to is the blood yes he's shaking his head no so i guess we'll hear from him in there was an hour there was also a statement by the chairman of the panel mr beeton that said we do not follow precedent we we are guided by it but we don't have to follow it which is true an arbitration panel is free to make its determinations on certain matters but let's focus on exactly what he's saying was the precedent that was violated here this prophylactic damages rule two points on this first the panel absolutely considered the claims for breach of contract and breach of fiduciary duty that arose during this timeframe between couldn't fidelity act on their instructions they did which is more of this stock they did until june until july twenty twelfth i know but then they didn't why did they not do it when they did not do it because they had concerns that they were engaged in stock manipulation and that that decision to not follow instructions there is one that is within the period that was directly addressed in the damage to the causation opinion of the causation opinion actually encompass the entire investment scheme right so i  thought so but taking mr grant's breakdown of the periods and the decision at the end of this whole process to call a halt and my wrong that that occurred during the period that he would he says is covered by those that would have occurred after the periods that he is describing and it's sort of an arbitrary cutoff is the july sixteenth decision to not accept any additional purchase orders for china medical that was made after the stock came back and was available for trading after the f c c halt and fidelity for all the concerns that it had decided not to allow continued purchases of the shares he's not alleging in this appeal that that decision was improper didn't follow preston and wasn't permissible the time period between say january and and that decision that he is alleging that there was the contract in place which there was that the firm had duties to accept you know certain orders absolutely between january and july of two thousand and twelve every order that mr deutsch present briefing prior to oral argument and closing in that pretty close in brief they repeated over and over again what the basis for their breach of contract and breach of fiduciary duty claims in that earlier period were and it all fell down it all came down to the alleged illegal lending claims and the arbitration panel absolutely took those claims into consideration they absolutely said fine we understand all of that but it was but regardless of that whatever their investment strategy was it was doomed to fail from the start their investment strategy itself was doomed to fail because of all of the issues surrounding china medical now that independent determination that there are no damages that can be connected in any way shape or form to anything fidelity did or did not do solves this entire appeal i mean i think that one of the things that's very important to keep in mind here is that the the factual finding by judge buchwald as to what the award actually says and the award actually says any and all claims raised by the claimants in the course the arbitration are denied it says it plainly and then it goes out in separate language to provide more information nobody asked them to do they were required to do it all exactly nobody asked them to do this they decided to go ahead and do this in order to provide additional detail an additional background and actually in the first case cited by the appellants in their reply brief which is the united steelworkers v enterprise will case they cite that for the proposition that where an arbitrator imperfectly executes their obligations that that's grounds for vacation i agree but that specific decision specifically says a mere ambiguity in the opinion accompanying an award which permits the inference that an arbitrator may have exceeded his authority is not a reason for refusing to enforce the award in fact arbitrators have no obligation to the court to give their reasons for an award and to require opinions free of ambiguity may lead arbitrators to play it safe by writing no you are not to micromanage the panel when they do provide opinions so long as the district court's interpretation of that award is not clearly erroneous right that's what the new york stock exchange versus europe's in leaving case that i cited to you holds that's also what a more recent case  called connecticut technology holds which is that by the side to the court of lights those sorts of determinations are findings of fact by the district judge where she essentially looked at all the matter she said everything was submitted to the panel but that the claimants wanted to submit to the panel they reached their determination because they felt nothing fidelity did or did not do cause their damages now this notion about this prophylactic rule that says if you find any sort of a breach of it you sure do you have to award some sort of damages i'm telling you that's pretty novel in the case they cite in their appellate brief for abco right which is the george harrison my sweet lord you know copyright infringement case the remedy that was sown and outcome was a constructive trust right so you know was very clear and very accurate in her statement that breaches of her sherry duty require everything we've always understood they require and you know the existence of the duty the breach and causation and damages and i take it there  contract with fidelity requires arbitration as a method of dispute resolution yes all brokerage contracts in the initiative thank you thank you very much we'll hear about something that they used to it to say ok we're not going to look at the period of time from march to june because the only thing that you can have a claim on is after july sixteenth and i agree with your honor that those case that part of the case is out but with regard to what happened before and the application of of the prophylactic damage will it's still it's it is not with regard to reliance damages it is not and it is not so that that this blah blah blah statement which was directed at judge wapner which was really sarcastic that's not what we're talking about here when we presented this proof this is the this is the colloquy it means second circuit authority you should accept the second circuit authority because that the arbitrator or arbitration doesn't have to follow precedent we follow the law but we don't follow precedent mr graef i think arbitrators have to follow clear an established precedent and if they don't and manifestly disregard then we would just disagree and the and the panel says go appeal and then while we're talking about they didn't agree that they were manifestly disregarding yes and if if we manifestly disregard to go appeal that's a trial judges say every day and what we're saying is that they've manifest disregarded in three were specs law that was presented to them clearly first the fiduciary duty law with regard to that first period the stock pickle rule was used by this panel to trump basically second circuit authority it trumped the the wilson case so if they're saying we're applying this rule rather than that rule and they're wrong that's not the same thing as saying we don't care what the law is that's getting the law or wrong that's saying this world from that rule maybe they're wrong but you folks are sophisticated investors signed up to have a brokerage firm knowing that you're going to be an arbitration you know i mean this is this is the way the world works yes you decide you know it goes to arbitration and you don't have the same rights that you have if you're quibbling with what a district court does and we have de novo review of whether  the district court correctly applied this rule rather than that rule you're in a very different world here i understand that first of all i think there is to know of over you you are the district court's decision i don't have time for that it's not clearly erroneous there were no factual determinations but more and more significant to your point iran or this is not a case where they analyzed and said we'll do this or this or the other this is a case where they were presented with the common law this is a case where when we signed the arbitration agreement we had every expectation that this circuits that authority that the precedent would be applied or at least they would try to apply it and they wouldn't instead ply a stock picker rule and here's one other manifestation of that in the record so while they had their finger expert testify who said basically it's never about client first after we were case of united states versus boeing we take that on submission that's the last case on calendar please adjourn court