In the recent case Citigroup Global Markets Inc. v. Ghazi Abdullah Abbar, et al., 13 Civ. 2172 (2d Cir. Aug. 1, 2014), the Second Circuit held that, under FINRA rules, an investor who purchased an over-the-counter derivative from a financial institution was not a “customer” of the financial institution’s affiliated broker-dealer, notwithstanding the broker-dealer’s involvement in negotiating and structuring the sale, and with the continued operation of the transaction. As such, the broker-dealer could not be compelled to submit to a FINRA arbitration commenced by the investor to recover its losses... Continue Reading