![]() ![]() On January 28, 1985, the parties entered into a stipulation, this time agreeing to conclude discovery and suggesting a pretrial setting for Apand trial for a date shortly thereafter. Magistrate was forced to vacate pretrial conferences on at least two occasions because of discovery disputes. In between, the parties informally discussed discovery matters apparently without success. Defendants followed with an Octonotice of depositions. On November 10, 1983, plaintiffs initiated the process by filing a notice of deposition and a request for production of documents. The record shows that since then, both parties have conducted discovery almost at will. As early as September 23, 1983, defendants raised in their answer the affirmative defense of arbitration. On July 6, 1983, plaintiffs amended the complaint as a matter of course by joining Paine Webber, Inc. ![]() Plaintiffs request damages and a rescission of the sale plus interests and attorney's fees. 77a, 77 l(2), the Securities Exchange Act of 1934, 15 U.S.C. The nub of the complaint is that Cofresí fraudulently misrepresented and deliberately withheld material information regarding the value of the bonds, in violation of the Securities Act of 1933, 15 U.S.C. An investor service subsequently reduced the rating of WPPSS bonds, eventually leading to a 10% decrease in its value by June 12, 1981. It is alleged that, as opposition mounted, WPPSS recommended to curtail the construction of certain projects. According to the complaint, these representations were made in the face of growing opposition by the Washington State Legislature to the construction of WPPSS nuclear power plants. Prior to the sale, Cofresí had allegedly represented that WPPSS bonds were highly-rated by two investor services, and constituted a stable and conservative investment. These bonds served to capitalize the construction by WPPSS of nuclear power plants in the State of Washington. acting through Cofresí-sold to plaintiffs about 500 municipal bonds issued by the Washington Public Power Supply System ("WPPSS"), bearing 6.2% coupons at a price of $285,000. The complaint alleged that on June 23, 1981, Paine Webber, Inc. (Cofresi), Vice President of Sales and registered representative of Paine Webber, Inc. On June 22, 1983, Eugenio Rodríguez Font (Rodríguez Font) and Eugenio Rodríguez Rolenson (Rolenson) brought suit against Milton Cofresi, Jr. Third, section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 claims, and Commonwealth law claims against both defendants are arbitrable, although claims under section 12(2) of the Securities Act of 1933 are not. and Milton Cofresí did not waive their right to arbitration. We resolve, first, that the parties intended by written agreements to arbitrate any dispute arising from the sale of securities described in the complaint. Federal jurisdiction has been asserted under 15 U.S.C. *463 Carlos Bobonis González, Bobonis, Bobonis & Rodriguez Poventud, San Juan, P.R., for defendants.īefore us is defendants' motion for a stay of trial or to compel arbitration. Brosterman, Stroock, Stroock & Lavan, New York City, for plaintiffs. November 21, 1986.īenny Frankie Cerezo, San Juan, P.R., Melvin A. PAINE WEBBER INCORPORATED, as successor to Paine Webber Jackson & Curtis, Inc., and Milton Cofresi, Defendants. ![]() 462 (1986) Eugenio RODRIGUEZ FONT, Eugenio Rodriguez Rolenson, and Ana T. ![]()
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