Bank Likely To Succeed On Merits As To Whether It, Or Its Corporate Trust Department, Was A "Municipal Securities Dealer" Subject To FINRA Arbitration.
If your eyes begin to glaze over when reading about the Financial Industry Regulatory Authority (FINRA), Municipal Securities Rulemaking Board (MSRB) rules, conduit municipal bonds, indenture trustees, Institutional Investment Departments (IIDs), Corporate Trust Departments (CTDs), and the Securities Exchange Act of 1934, then this case is not your meat. But if you are interested in FINRA arbitration and a close reading of rules, perhaps this case is meant for you. The case is BOKF, NA v. Estes, et al., No. 18-15369 (9th Cir. 5/2/19) (Berzon, J., Friedlan, Dominguez).
The panel held that the Bank of Oklahoma, National Association (BOKF) was likely to succeed on the merits by showing that it and its CTD were not a "municipal securities dealer" and thus not compelled to arbitrate with a group of unhappy municipal bond holders. The Bank's IID was registered as a municipal securities dealer, but the bank, and the CTD were not registered. The CTD did not buy or sell bonds for its own account or for any other division of the bank. Nor was the bank, as a whole, a municipal securities dealer on the basis that one of its component parts, the IID, was a dealer. Conclusion: reverse the district court's denial of the bank's motion for a preliminary injunctions against arbitration. This is all based on a close reading of some very technical rules.
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