Harry R. Conover v. Dean Witter Reynolds, Inc., and Brenton Ogden, and Sears, Roebuck & Co.

I. INTRODUCTION

This is an action by a customer against his securities broker for damages resulting from alleged violations of section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 of the Securities and Exchange Commission Rules. In this appeal by the broker, the issue is whether the claim should be submitted to arbitration under the arbitration provision of the parties’ customer agreement. Relying upon the Supreme Court’s decision in Wilko v. Swan, 346 U.S. 427 , 74 S.Ct. 182 , 98 L.Ed. 168 (1953), and subsequent decisions of this circuit, the district court denied the defendants’ motion to compel arbitration.

The genesis of this appeal is Justice White’s special concurring opinion in Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 , 105 S.Ct. 1238 , 84 L.Ed.2d 158 (1985). Justice White there questioned whether Wilko’s holding, i.e. the non-arbitrability of claims arising under the Securities Act of 1933, applies to claims arising under the Securities Exchange Act of 1934. This is the first of a number of similar cases, involving arbitrability of customer claims against a broker under section 10(b) of the 1934 Act and Rule 10b-5, to reach this court since the…