* The Honorable David G. Larimer, of the United States

District Court for the Western District of New York, sitting by

designation.

12-58-cv

Twenty-First Securities Corp. v. Crawford 

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER 

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,

2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.

WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN

ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON

ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals

2 for the Second Circuit, held at the Daniel Patrick Moynihan

3 United States Courthouse, 500 Pearl Street, in the City of

New York, on the 9th 4 day of November, two thousand twelve.

5

6 PRESENT: RICHARD C. WESLEY,

7 DENNY CHIN,

8 Circuit Judges, 

DAVID G. LARIMER,* 9

10 District Judge. 

11

12 

13 Twenty-First Securities Corporation, 

14

15 Plaintiff-Appellant,

16

17 v. 12-58-cv

18

19 Dr. Byron Crawford,

20

21 Defendant-Appellee. 

22

23 

24

25 FOR APPELLANT: Daniel Gildin, Kevin M. Shelley, Kaufmann

26 Gildin Robbins & Oppenheim LLP, New York,

27 NY. 

28

29 FOR APPELLEE: Robert A. Uhl, Aidikoff, Uhl & Bakhtiari,

30 Beverly Hills, CA; Steven B. Caruso,

31 Maddox Hargett & Caruso, P.C., New York,

32 NY. 
2

1

2 Appeal from the United States District Court for the

3 Southern District of New York (Pauley, J.). 

4

5 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

6 AND DECREED that the memorandum and order of the United

7 States District Court for the Southern District of New York

8 is AFFIRMED.

9 Plaintiff-Appellant Twenty-First Securities Corp.

10 (“Twenty-First”) appeals from a memorandum and order of the

11 United States District Court for the Southern District of

12 New York (Pauley, J.), denying Twenty-First’s motion to

13 preliminarily enjoin a Financial Industry Regulatory

14 Authority (“FINRA”) arbitration proceeding filed by

15 Defendant-Appellee Dr. Byron Crawford. The arbitration

16 arises from Crawford’s investment, through his nominee Rahn

17 & Bodmer, in the 1861 Capital Discovery Domestic Fund LP

18 (“1861 Fund” or “Fund”) based on advice from Twenty-First, a

19 brokerage and investment firm. The district court denied

20 Twenty-First’s motion for a preliminary injunction because

21 it concluded, inter alia, that Crawford was Twenty-First’s

22 customer with respect to Crawford’s investment in the 1861

23 Fund and, therefore, entitled to arbitration pursuant to

24 FINRA Rule 12200. The panel has reviewed the briefs and the

25 record in this appeal and agrees unanimously that oral
3

1 argument is unnecessary because “the facts and legal

2 arguments [have been] adequately presented in the briefs and

3 record, and the decisional process would not be

4 significantly aided by oral argument.” Fed. R. App. P.

5 34(a)(2)(C). We assume the parties’ familiarity with the

6 underlying facts, the procedural history, and the issues

7 presented for review.

8 When reviewing a district court’s denial of a

9 preliminary injunction, we review the district court’s

10 findings of fact for clear error, its legal conclusions de

11 novo, and its ultimate decision for abuse of discretion. 

12 Arbitrability is a question of law for the court to decide. 

13 Wachovia Bank, Nat’l Ass’n v. VCG Special Opportunities

14 Master Fund, Ltd., 661 F.3d 164, 171 (2d Cir. 2011); UBS

15 Fin. Servs., Inc. v. W. Va. Univ. Hosps., Inc., 660 F.3d

16 643, 648 (2d Cir. 2011) (citation omitted). 

17 To prevail on its motion for a preliminary injunction,

18 Twenty-First was required to demonstrate, inter alia, a 

19 “likelihood of success on the merits," i.e., that Crawford

20 was not entitled to arbitrate his claims. Citigroup Global

21 Mkts., Inc. v. VCG Special Opportunities Master Fund Ltd.,

22 598 F.3d 30, 35 (2d Cir. 2010) (internal quotation marks

23 omitted). Where, as in this case, there is no written
4

1 agreement to arbitrate, a claim against a FINRA member is

2 subject to mandatory arbitration only where arbitration is

3 “requested by the customer.” FINRA R. 12200. Here, the

4 district court correctly concluded that Crawford was Twenty5 First’s “customer” with respect to his investment in the

6 1861 Fund. See, e.g., Bensadoun v. Jobe-Riat, 316 F.3d 171,

7 177 (2d Cir. 2003) (citing Lehman Bros. Inc. v. Certified

8 Reporting Co., 939 F. Supp. 1333 (N.D. Ill. 1996)). 

9 We reject Twenty-First’s contention to the contrary. 

10 The district court’s finding was not clearly erroneous. 

11 Moreover, Twenty-First failed to present any evidence

12 contradicting Crawford’s showing that he was a customer. It

13 is well settled that "the party opposing arbitration ‘may

14 not rest on a denial but must submit evidentiary facts

15 showing that there is a dispute of fact to be tried.’"

16 D'Antuono v. Serv. Rd. Corp., 789 F. Supp. 2d 308, 319-20

17 (D. Conn. 2011) (quoting Oppenheimer & Co., Inc. v.

18 Neidhardt, 56 F.3d 352, 358 (2d Cir.1995)).

19 General principles of construction also weigh in favor

20 of arbitrability here. This Court has held that when

21 interpreting FINRA’s arbitration rules, “‘any doubts

22 concerning the scope of arbitrable issues should be resolved

23 in favor of arbitration.’” Wachovia Bank, 661 F.3d at 171

24 (quoting Bensadoun, 316 F.3d at 176). 
5

1 We have considered Twenty-First’s remaining arguments

2 and, after a thorough review of the record, find them to be

3 without merit. Accordingly, the memorandum and order of the

4 district court is hereby AFFIRMED. In light of our

5 decision, Crawford’s motion to supplement the record is

6 DENIED as moot. The Public Investors Arbitration Bar

7 Association’s motion to file an amicus brief is GRANTED. 

8 FOR THE COURT:

9 Catherine O’Hagan Wolfe, Clerk