Rotunno v. Laidlaw & Company LTD

Background

Robert Nicholas Rotunno, a former broker employed by Laidlaw & Company (UK) LTD, began an arbitration proceeding before the Financial Industry Regulatory Authority (FINRA) in July 2020. He sought removal of customer-dispute information from his Central Registration Depository record under FINRA Rule 2080. The information concerned ten identified occurrences involving allegations such as unauthorized trading, unauthorized use of margin, unsuitable activity, misrepresentation, breach of contract, and breach of fiduciary duty.

Laidlaw filed an answer that did not contest Rotunno’s request. Neither Laidlaw nor the customers involved in the occurrences participated in the May 2021 arbitration hearing, although the customers received notice. After considering the pleadings, Rotunno’s testimony, his BrokerCheck report, settlement agreements, and other exhibits, the arbitrator recommended expungement. The arbitrator found, for each occurrence, that the claim, allegation, or information was false, not applicable, factually impossible, or clearly erroneous.

Rotunno then asked the federal court to confirm the arbitration award under 9 U.S.C. § 9. FINRA waived its requirement that it be named as a party in a court petition seeking confirmation of an award containing expungement relief. Laidlaw was served with the petition but did not oppose it or otherwise appear.

Legal standard

Under the Federal Arbitration Act, a court generally must confirm an arbitration award unless it is vacated, modified, or corrected. Because Laidlaw did not answer the petition, the court treated it as an unopposed motion for summary judgment. Summary judgment is appropriate when the evidence shows that no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. Even when a motion is unopposed, the court must review the moving party’s materials and determine whether that burden is met.

Court’s analysis

The court found no material factual dispute. Laidlaw had not challenged the material facts supporting the petition and had not contested Rotunno’s expungement request during the arbitration. The arbitrator relied on unrefuted testimony and other evidence, including settlement agreements that were not conditioned on opposition to expungement.

The court concluded that the record provided an ample basis for the arbitrator’s award and that the arbitrator had explained the recommendation. The court also found no basis to conclude that the arbitrator acted outside her authority. It therefore determined that Rotunno had shown that no material issue of fact remained and that the award had to be confirmed.

Disposition

The court granted Rotunno’s motion to confirm the arbitration award. It ordered that all references to the ten identified occurrences be expunged from Rotunno’s Central Registration Depository record. The Clerk of Court was directed to terminate pending motions and close the case.