Janvey v. Alguire
United States Court of Appeals for the Fifth Circuit
647 F.3d 585 (2011)
- Written by Emily Pokora, JD
Facts
The Securities and Exchange Commission (SEC) (plaintiff) initiated a lawsuit based on an alleged Ponzi scheme against Stanford Group Company (SGC) and Stanford International Bank. A preliminary injunction was granted to the court-appointed receiver to freeze assets of SGC agents and employees (employees) (defendants) pending resolution at trial. The employees filed a motion to compel arbitration pursuant to an arbitration clause in a promissory note entered with SGC. The district court upheld the receiver’s preliminary injunction before considering the employees’ motion to compel. The employees appealed, arguing that the court was precluded from granting the injunction with a pending motion to compel arbitration. The employees contended that the receiver’s claims regarding SGC were subject to arbitration by virtue of the promissory note and its application of Financial Industry Regulatory Authority (FINRA) rules. The receiver contended that the court properly granted the injunction to preserve the status quo despite the pending motion to compel.
Rule of Law
Issue
Holding and Reasoning (Prado, J.)
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