No independent basis for federal question jurisdiction under SLUSA. A shareholder of Archon Corp.’s preferred stock appealed the district court’s dismissal of his class action suit against the company for breach of contract under Nevada law in which he claimed Archon improperly calculated the redemption price of shares of preferred stock. Plaintiff argued that the Securities Litigation Uniform Standards Act provides a basis for the district court’s federal question jurisdiction. The US Court of Appeals for the Ninth Circuit affirmed dismissal, holding that plaintiff failed to assert a federal claim and SLUSA does not create an independent basis for federal question jurisdiction over plaintiff’s state law claim. (12/21/2016) David Rainero v. Archon Corp.
Court rejects broker-dealer’s challenge to FINRA disciplinary proceeding. After the Financial Industry Regulatory Authority brought a disciplinary proceeding against it for selling unregistered securities in violation of the Securities Act, a broker-dealer sought an injunction in federal court, claiming the proceeding is unauthorized because FINRA may only discipline members for violations of the Securities Exchange Act. The US Court of Appeals for the Fourth Circuit affirmed dismissal, holding that FINRA’s interpretation of its authority to charge its members with violations of the Securities Act is plausible and the firm can obtain meaningful judicial review following the appeal process outlined in the Exchange Act. (12/20/2016) Scottsdale Capital Advisors v. FINRA.