i had requested three minutes it appears to be the number that everyone acts today so for rebuttal make sure here number may please the court i mark them wagoner together with my colleague craig perry we represent wilson davis the appellant in this case the sole issue on this appeal is whether the district court properly determined that the claims against wilson davis are subject to fin arbitration the district court's determination that wilson davis must submit to arbitration is reviewable no wilson davis does not contend that the lower court made an iranian's finding fact rather we contend that the district court erred in two ways basing its decision on testimony that is incompetent and inadmissible under the federal rules of evidence and two that even if that evidence were accepted as proper the district court erred in applying that evidence to the clearly ingle standards for determining arbiter ability under the federal rules based on federal rule of evidence six o two and the controlling cases the court should reverse the decision of the district court and remain the case to that court with a directive to enter a declaratory judgment that at the least cannot require wilson davis to arbitrate the dispute regarding the alleged losses in newmarket enterprise's the district court decision is inherently erroneous for two specific and plain reasons either of which justifies its reversal first the district court's decision really admittedly relies on inadmissible and incompetent testimony from james work liotta and i will come back to this but let me just say that the explain how the case began mr mclean on his own and on behalf of his late wife says they filed a claim in arbitration against wilson davis and it claimed three separate causes the first were securities of q lotus the second were securities of v tale and the third was a transaction in which mr mclean oughta sent money out of his own personal account to an account in the bank of america i think it's in new york city as to the first  was that wilson davis had wired this money directly to another company new market enterprise turns out there's no evidence of that and so as we began to do some discovery on this issue i began to ask mr merkley otto why he thought that wilson davis had anything to do with his separate sending of his own money to an account that was outside wilson davis and had nothing to do he initially said he had never met the agent who supposedly told him to send it he didn't know the man when he called on the phone and then he said the way he knew who it was was because someone else told him no first of all that shows he had no foundation to say that it was anyone from wilson davis and secondly his only means of knowing who it was is inadmissible hearsay now i gathered this in the deposition so that if we had a hearing i could object to foundation and hearsay and none of it would have committed but because it was done on the papers before the judge she looked at this and her determination was to use her words she found that mr  auda believed that it was the representative of wilson davis who told mr ripley oughta to wire money to this account that's that has nothing to do with what's in davis now but let me say i'll come back to that rules according to the cases that that discusses and in particular the best tax case which is the sixth circuit case on which everyone seems to rely of finra rule twelve twenty provides that in the absence of an express agreement and there is none here a finn remember like wilson davis can be required to arbitrate a dispute only if the dispute is between a customer in a member or an associated person of a member is important for this matter the dispute arises in connection with the business activities of the member of the association all cases cited by both sides  and yet they seem to want to argue that that dispute is is arbiter bull there may be legal theories by which they could file a case and prevail but i've looked at all of the cases and fortunately i have them but we won't read all of them i hope but but in each and every case there has been no finding of the of arbitration of the need or the right or a command to arbitrate and less the dispute related to the loss inside a securities account either own by the member the broker dealer or a broker himself for  in the r bar case this is what they say they say likewise the finn remember should anticipate that account holders may have bailed themselves of the arbitration for up to dispute quote trance actions arising from the account that the transaction here of which he complains did not arise within or because of an account held it will send davis for it no think about that without that common sense limitation an account holder could bring any grievance in arbitration if all they had to have was an account mr merkley oughta walks into wilson davis one of the brokers is take the backstairs it's slippery he falls he can't arbitrate that there has to be some limitation on the right to arbitrate even if there is an account and that limitation is that the dispute itself the damage the injury must occur in an account which is held by the member or is held by the broker and that's the best tax case in the there's no question that the broker that vest tax did not know that money was being put in to accounts and that the investors were going to lose money but what they said let me let me just read it to me pull it up and read it to you because i think it's important what they say here is they say there's no question that the investors ha little in the way of contractual or other round trip contractual or transactional relationship with those debtors ok so they had no relationship with the broker yet the broker was required arbitrate why well they explain at the bottom of the page each one of the investors however did a stablished trading accounts with davison done in davis and done with the brokers  which they say in which they purchased the securities that the agents recommended to them so even investor x even if it is cleared from the sixth circuit case that unless and until there is an allegation that the dispute is over a loss in an account at the broker or in the in a rogue agents in the broker dealer in a row about a half million dollars into some accounts in city u k in england and those accounts were managed by were there were individuals in new york city at city n y new york who gave him advice that helped to manage these accounts that talk to him about where things should go and in the end he lost about four hundred million dollars he tried to arbitrate against city new york and the second circuit said you can't and the reason for that they said was it was really quite clear what they said was that he was not a customer he said finn remember should anticipate that account holders may avail themselves of the arbitration for him to dispute transactions arising from the account but there was no account and city new york and so the second circuit hell that he could not force it in new york to arbitrate i would take that to this case i suggest that and you can read this because it's all in the briefs but i suggest that even if one thought that that one of wilson davis's agents s iata oh go ahead and send them off it doesn't rise to that to the level of any sort of loss in an account it will soon davis so wilson davis should not have to arbitrate that even if your agent was aware and encouraged this transaction the money going from one account to wilson davis to another account for the purpose of purchasing this new market that it have to have been done in that account otherwise while all of the cases say any each and every one in every one where there's arbitration there was a loss in an account held by either the brokerage house or a road broker there is no case in which arbitration was required where the loss was in a separate account somewhere else altogether now that i'm not saying you can't come up with lego heerey the language this is pertinent to is what the involving or the customer l is a dispute arising in connection with the business activities of the member of the association the second part of it the first is the customer yes that's true cost yes and a member or associated person member i don't i don't know how you can say there's not a customer hears so he is he's being so aren't they satisfy the first prong of customer so you rely on the second prong that it's it's doesn't arise in connection with the business activities yes and what i'm saying is that every case say that the loss has to occur at the wilson davis account as opposed to out or it matters not quite what it says i mean it activities broader well finra regulates the business activities of securities dealers the business of securities dealers is the well you know i don't i don't doubt that their customers because their customers for the purpose were passed the customer problem and then we're just in the business activities well not you know have a very very narrow definition of business activity all this money in an account it also davis account and in the agent wilson davis guy told them to transfer the money to him in order that he could make another investment and then he went to the bahamas with it whatever that is it was sent there and he on his own volition wired it out of his own personal account to a bank of america ok so so those why should we limit business activities to loss and  well the holding in the vest tax case right now is that this tax was required to arbitrate because remember this because it's rogue brokers bought and sold securities in their own personal accounts and so what i'm saying is that was how they found that this tax was required to arbitrate they didn't find they were required to arbitrate because there broker told somebody to invest down the street and so i think that's the whole i think we have to bring this to a halt yes questions regarding the best tax case invest tax this circuit had previously held that quote a dispute that arises from a firm's lack of supervision over its brokers arises in connection with its business invest  customers of two registered representatives a vest x sought to compel vest x into arbitration for a legit poor investment advice and for failure to supervise its agents the investors never established where the broker dealer was not aware of transactions placed through other broker dealers or in this case other accounts wilson davis originally brought this action in federal court seeking a determination that the murder we had as were not customers of theirs and as such the dispute was not properly before finra up for adjudication or subject to the finra arbitration procedures wilson davis original argument was premised on the fact that the allegations in the statement of claim before finra were that the murder we had as accounts were opened without their full knowledge and consent and certain documents were forged wilson davis argued that if not given their full knowledge or consent and they were forged documents that they may not have known they were customers and if they weren't customers they wouldn't be subject to finra arbitration as it turned out after paper discovery was exchanged depositions were taken in the lower court case the evidence was clear that the murder we had as were customers of wilson davis while davis who is the chairman of the board of wilson davis and the treasurer of the company testified at deposition regarding the proper procedures were the procedures used wilson davis to open new customer accounts and indicated that those procedures were followed in the opening of the merck we had as accounts the procedures included reviewing the account applications issuing age suitability letters in one recommendation letters obtaining self directed authorizations for retirement accounts reviewing driver's licenses and then issuing account numbers each of these steps was followed him or gratis applications there's even correspondence in the in the it was produced in the case where employees wilson davis namely brant davis asked for additional information on the  receiving their initial applications brant davis requested copies of driver's license driver's licenses an executed applications which were provided to him mr while davis testified that the new account application for the murder charges were not only reviewed by christopher serino their account representative but were also reviewed by officers at wilson davis including lyle davis himself interestingly mr davis twelfth enjoy nineteenth of two thousand and thirteen respectively and mr murphy had to testify to his deposition that he was not surprised to receive documents from wilson davis because he understood that his four hundred one k money was being davis sent them early on his account statements each month during the relevant periods of july august and september of two thousand and thirteen stocks were purchased by wilson davis in mr as account mr m was contacted by his account representative it was in davis christopher serve you know to discuss the way or where transfers that are in issue in this case mr magoo had also testified quote all i was doing was following the instructions from mr serino who was an employee and was the agent of wilson davis and mr where we were both who was my agent and i think there's some question here about whether in fact mr murray out knew that mr server you know was involved in that regard to the wire transfers mr survie you know was the one who called mr murray out of to instruct him on what to do edward duranty the other individual who is part of the criminal conspiracy had sent mr murray out an e mail with specific where instructions the e mail in question specifically said in essence you're to go to the but you're to go to your bank on monday afternoon wilson davis will be wearing five hundred and sixty thousand dollars to your personal account when the money arrives you're to wire the money to new market enterprises so he received that communication from you're talking about they seem to concede that the clients or customers are just the real question is whether the other required image is that whether this is it in connection you address that specifically yes in the case the central inquiry was was the was was the person it was the individual claimant an account holder was a customer of the of the company in this in the inquiry in our bar ended at that point in this case as your as you indicated judge white wilson davis has accounts they still had stocks in the accounts they were still receiving account statements but what what wilson davis is trying to argue that their innocence cherry pick or try to craft out the fact  because the money after it was wired to their personal account was wired to market enterprises that that somehow relieves them of jurisdiction of finra in this case th conduct for either failure to monitor affair or to supervise chris serino as their account representative or their failure to monitor and supervise them early on as accounts in the transactions and activity that occurred in those accounts  true the real question is because the merkley others got it sorted back into this as the middleman in the new market enterprises transaction that relieves wilson davis of any responsibility for that transaction criminal conspiracy and they're awaiting sentencing chris serino was an active participant in the fraud in for a one key transactions money can be transferred out of a four hundred one k account in only two circumstances if it gets transferred to another for one care count and there's a special doesn't need it banking system that handles that transaction separately there can be no effect there can be no fraud in that transaction the only other possibility of what a person can do with for one k monies is to have it sent directly to them under no circumstance can you direct it to a third party you can only have it directed to yourself so that the thieves the criminals chris knew that knew that they knew that the only way they were going to steal them or bad is money was if they somehow got the money into their account first and then had it transferred to the american enterprise which was the sham company so chris was was part and parcel of that are one of our claims is did wilson davis fielder failed to properly monitor and supervise their account representatives activity that  to the lead to the theft and that was part of the business activity question invest x the court held quote a dispute that arises from a firm's lack of supervision over its brokers arises in connection with its business judge gone held that the evidence on the record in this case was quote sufficient to show that the defendants were wilson davis customer with respect to newmarket enterprises and that quote the evidence also supports that defendant's claim against wilson davis for negligently failing to monitor their accounts and negligently failing to train and supervise its advisors arises in connection with the activities of servia no right on point with with this court's ruling investor xx as the district court correctly determine there is unambiguous evidence on the record linking serino and wilson davis to monday's wired out of wilson davis to newmarket enterprises that was the scam jurisdictional issue and that is should these should those issues be decided in federal court or in finner arbitration the question of whether the murderer out as were customers of wilson davis does not extend to what transactions wilson davis is responsible for because courts have defined the term customer broadly in fit in the finra context by trying to stretch the issue of jurisdiction way beyond its natural scope to include issues of liability and damages which are properly before the federal panel they are misguided the evidence on the record is clear that the murderer out as were customers of wilson davis their claims ar in connection with the business activities of appellant and accordingly the murders are entitled to resolve these disputes in finra arbitration in conclusion the district court's finding that appellant is required to arbitrat his claims regarding american enterprises is not clearly erroneous based on a complete reading of the record and should be upheld for those reasons and it's not clearly rocks that it issue of law or as an issue of fact the the the burden for the review is clearly erroneous on the findings of fact that the judge applied to the law but the ultimate conclusion here is an issue of law the issue of whether wilson davis failure to monitor the murder we had as accounts and failed to properly monitor train and supervise christer vino was in connection with the business active sounds like an issue of and not an issue of fact that was a yes ok i'm sure i may have misunderstood well i just see the issues here as all issues of law i mean you ended by saying it's not work which is the standard for reviewing issues of findings of fact but i i don't see any particular issues of fact here i i thought i see this is a legal determination of whether under these facts the dispute arises in connection with the business activities of the member i don't think there's really an issue that the that there are a customer here and i think that's well settled but whether these facts satisfy the standard of a dispute in connection with business activities i think it's a legal term a nation that's all and i part i i did misunderstand the question but you are you're actually right i was not arguing that a criminal conspiracy is not in this record and then not even going to inject it but it's not there let me go back as i said i might to what the testimony actually was the first mission of mr savina is on page fifteen of of the deposition did you ever meet mr christopher survey no no i've never met him did you ever speak with him yes how do you know it was chris or vino i remember the name and mr we're both told me to expect a call from him so it was mr riddell who told you i if you wrote a check to newmarket enterprises i think that's where i wrote the check question roy was that your decision to do so was it not answer i was instructed to do that by mr world will while i'm not sure it was mr were both or mr survey no at this time i'm really not question tell me on the record why you would take instruction from mr survie no answer because maybe mr will told me too but you can't recall a conversation no i can't and you can't recall if mr survey you know actually told you  d anywhere can you answer i can't recall i'm going to ask you to tell me everything you can remember that mr survie not told you on the telephone answer i don't recall that was four years ago other these structures were clear i was getting a phone call from m survey you know about the money transfer and the instructions were descended to newmarket that's all i can tell you question who told you that you were getting the phone call that was mr were and mr rubel told it instructions were to send it i mean we have paperwork answer i don't recall a question you don't remember answer no my question and on the basis of no recollection you believe that mr survie no one wilson davis caused you personally to send money to newmarket enterprises answer yes he had no recollection everything that he testified to was not competent evidence and it was given as a result of a can't even knowing it was coming was given as a  something that would be hearsay so there's no evidence no competent evidence in the record to tie wilson davis to this but as to the question of the two prongs let me read to you from vest tax it says on page  ten eighty one quote in other words there are two conditions that must be satisfied to trigger the any s t in that's the predecessor to finda arbitration requirement first the claim must involve a dispute between either  member and a customer or an associated person and a customer and second the dispute must arise in connection with the activities of the member or connection with the business activities of the associated person and that is why in every case where there's been a dispute there has been business activities inside an account either held by the member or by a rogue broker for that reason we