Dees

MEMORANDUM OF DECISION AND ORDER

Plaintiff Rigdon O. Dees III brings this action alleging violations of § .10(b) of the Securities Exchange Act of 1934 (“the 1934 Act”), 15 U.S.C. § 78j(b), and S.E.C. Rule 10b-5. Pendent claims alleging fraud, breach of fiduciary duty, negligence and breach of oral contract were previously dismissed under the principles set forth in United Mineworkers v. Gibbs, 383 U.S. 715 , 86 S.Ct. 1130 , 16 L.Ed.2d 218 (1966).

Dees charges defendants with misconduct in the management of his securities account. Specifically, he alleges that defendant Ira T. Distenfield, as the account executive, and Smith Barney, Harris Up-ham & Co. (“Smith Barney”) as principal, executed unauthorized transactions which were excessive in volume and frequency and were made solely for Smith Barney’s benefit. In addition, plaintiff charges defendants with a number of fraudulent misrepresentations.

Plaintiff’s claim arises from a securities account opened by him at the Beverly Hills office of Smith Barney in October 1983. At the time he opened the account, plaintiff signed a Securities Account Agreement (“the Agreement”) which provides, in part: “Any controversy between Smith…