Hardy v. Walsh Manning Securities

341 F.3d 126 (2003)

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Hardy v. Walsh Manning Securities

United States Court of Appeals for the Second Circuit
341 F.3d 126 (2003)

  • Written by Alexander Hager-DeMyer, JD

Facts

Warren Hardy (plaintiff) opened an investment account with Walsh Manning Securities, LLC (Walsh Manning) (defendant) and its chief executive officer, Frank Skelly (defendant). Despite his title, Skelly was considered an employee of Walsh Manning rather than an officer. Hardy’s account was handled directly by Barry Cassese. Hardy filed a claim with the National Association of Securities Dealers (NASD), stating that Cassese, Skelly, and Walsh Manning misrepresented the health of certain investments and intentionally promoted them to benefit Walsh Manning. Hardy’s claim proceeded to arbitration with the NASD, and Cassese testified that the improper actions on Hardy’s account were taken due to or with the knowledge of Skelly and Walsh Manning. The arbitration panel issued an award stating that Walsh Manning and Skelly were jointly and severally liable for damages based on the principles of respondeat superior. Hardy moved in federal district court to confirm the award, and Walsh Manning and Skelly moved to vacate. The district court found that Skelly could not be held liable under respondeat superior as a fellow employee of Cassese at Walsh Manning. However, the court also found that the award could plausibly be read as implying that Skelly was liable on other, unlisted grounds. The district court confirmed the award as written, and Skelly and Walsh Manning appealed to the Second Circuit. After affirming the district court’s judgment as to Walsh Manning, the court addressed Skelly’s appeal.

Rule of Law

Issue

Holding and Reasoning (Pooler, J.)

Dissent (Straub, J.)

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