Citibank

Appellant Citibank, N.A. (Citibank), petitioned the superior court to vacate or correct an arbitration award in favor of respondents Crowell, Weedon & Co. (Crowell), Clifford Drake & Co., Inc. (Drake) and others. (Code Civ. Proc., §§ 1285,1286.2.) The court denied the petition and entered judgment confirming the award. (Code Civ. Proc., §§ 1286, 1287.4.) Citibank appeals. (Code Civ. Proc., § 1294, subd. (d).)

The underlying dispute is among various municipal securities broker/ dealers concerning their relative liabilities, under the rules of their organization, the Municipal Securities Rulemaking Board (MSRB), for the sale of bonds which had been stolen.

The rules of the municipal securities industry provide for the “reclamation” of bonds which have previously been accepted for delivery, if some defect in the original delivery is subsequently discovered. A subsequent discovery that delivered bonds were stolen allows for such reclamation by the purchasing party back to the selling party. The reclamation procedure allows the purchasing party to return the bonds to the last seller, which may then reclaim the bonds back to the party which sold to that seller, and so on up…