Opinion ID: 3010878
Heading Depth: 2
Heading Rank: 2

Heading: The Arbitration Provisions

Text: The resolution of the issues in this appeal first calls for a parsing of the relevant documentation and, in particular, the language of Form U-4 itself.3 This form provides that the applicant agreed to: arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the ...[NASD] as may be amended from time to time. Form U-4 further states that each applicant will: abide by, comply with, and adhere to all the provisions, conditions and covenants of the statutes, constitutions, certificates of incorporation, by-laws and rules and regulations of the ... [NASD] as they are and may be adopted, changed or amended from time to time.... Incorporated by reference through these two provisions is the NASD Code of Arbitration. Part I Section One of the Code articulates which matters are eligible for arbitration: any dispute, claim, or controversy arising out of or in connection with the business of any member of the [NASD], or arising out of the employment or termination of employment of associated persons(s) with any member, with the exception of disputes involving the insurance business of any member which is also an insurance company: (1) between or among members; (2) between or among members and associated persons; _________________________________________________________________ 3. The relevant language at issue refers to the most current Form U-4 and the NASD Code of Arbitration, as amended in 1993. Although the plaintiffs had argued before the district court that the pre-1993 Code of Arbitration applied, they do not raise that contention on appeal. 5 (3) between or among members or associated persons and public customers, or others; and (4) between or among members, registered clearing agencies with which the [NASD] has entered into an agreement to utilize the [NASD] arbitration facilities and procedures, and participants, pledges, or other persons using the facilities of a registered clearing agency, as these terms are defined under the rules of such a registered clearing agency. Part II Section 8 of the Code mandates arbitration for [a]ny dispute, claim, or controversy eligible for submission under Part I of this Code between or among members and/or associated persons.... All the plaintiffs signed Form U-4 as a condition precedent to their employment at Prudential.4 Prudential, however, is not a signatory to the agreement.5 Rather, the firm identified in Form U-4, is Pruco Securities Corp., a wholly-owned Prudential subsidiary.