Bass v. Citi Global Markets, Inc.

Background

Robert C Bass filed a petition under the Federal Arbitration Act seeking to vacate, or cancel, an arbitration award in favor of Citi Global Markets, Inc. In the underlying FINRA arbitration, Bass claimed that Deutsche Bank AG sent a $1 billion cash transfer to his Personal Wealth Management account at Citi on May 7, 2019, but that he never received the funds. He sought the $1 billion, treble punitive damages, and costs. Citi denied receiving the money on his behalf.

The arbitrators held an evidentiary hearing on June 5 and 6, 2024. They granted Citi’s motion to dismiss after finding that the evidence Bass offered concerning the wire transfer was not genuine. The arbitration award, entered June 10, 2024, dismissed Bass’s claims with prejudice and assessed $11,025 in hearing fees against him.

Arguments and analysis

Bass argued that the award was obtained through corruption, fraud, or improper methods. His allegations concerned changes to FINRA’s case-administration team, alleged improper communications between FINRA and Citi, and an alleged hacking of FINRA’s systems. The court found that Bass largely focused on FINRA’s administrative conduct, did not adequately allege fraudulent activity by Citi, and offered no evidence supporting the alleged improper communications.

Bass also argued that the arbitrators were partial or corrupt. He relied on an arbitrator’s description of him as a “vexatious litigant,” a Citi witness’s presence throughout the hearing, restrictions on his representative’s participation, and an allegation that the panel eavesdropped on him in a video-conference breakout room. The court found no credible support for the eavesdropping allegation and concluded that the other circumstances did not require a reasonable person to find that the arbitrators were biased.

The court rejected Bass’s argument that the arbitrators committed misconduct by failing to postpone the final hearing. The court stated that Bass did not appear to have requested a postponement and found no indication that the arbitration procedure was fundamentally unfair. It also held that the arbitrators did not exceed their authority by deferring Citi’s motion to dismiss until after Bass’s case in chief, because FINRA’s rules allowed that timing.

The court further concluded that Bass had not shown “manifest disregard of the law,” a narrow basis for vacating an award that requires proof that the arbitrators ignored a clearly defined and applicable legal principle. The court found that the legal authorities Bass cited did not relate to the arbitration proceedings. It also rejected his challenges to the arbitrators’ denial of reconsideration and refusal to add Pershing, LLC as a respondent shortly before the final hearing.

Ruling

Judge Valerie Caproni denied Bass’s petition. Because Citi opposed the petition, the court treated that opposition as a request to confirm the arbitration award. The court confirmed the award, directed the Clerk of Court to terminate all open motions, and closed the case.