UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT OPPENHEIMER & CO. INC., No. 24-2379 D.C. No. Plaintiff - Appellee, 2:23-cv-00067- MJP v. STEVEN MITCHELL; DORI OPINION MITCHELL; JEROME HOPPER; LORI HOPPER,

Defendants - Appellants.

Appeal from the United States District Court for the Western District of Washington Marsha J. Pechman, District Judge, Presiding Argued and Submitted April 1, 2025 Pasadena, California Filed April 24, 2025 Before: MILAN D. SMITH, JR. and LAWRENCE VANDYKE, Circuit Judges, and JANE MAGNUS- STINSON, District Judge. * Opinion by Judge Milan D. Smith, Jr.

* The Honorable Jane Magnus-Stinson, United States District Judge for the Southern District of Indiana, sitting by designation. 2 OPPENHEIMER & CO. INC. V. MITCHELL

SUMMARY **

Arbitration

The panel affirmed the district court’s order granting summary judgment in favor of Oppenheimer & Co., Inc., which sought a declaration that the Defendants, the alleged victims of a Ponzi scheme, were not its customers and therefore not entitled to arbitration; and entering a permanent injunction prohibiting Defendants from arbitrating their claims. In November 2021, Defendants commenced an arbitration proceeding against Oppenheimer in the dispute resolution arbitral forum of the Financial Industry Regulatory Authority (FINRA). Before a final evidentiary hearing was scheduled to begin before a panel of arbitrators, Oppenheimer filed the present action against Defendants. Although Defendants conceded that they had no direct relationship with Oppenheimer, a FINRA member, they alleged that they were customers of Oppenheimer for purposes of FINRA Rule 12200 because they transacted with Oppenheimer employee John Woods, who was one of Oppenheimer’s “associated persons” within the meaning of the FINRA Code. The panel held that a “customer” under FINRA Rule 12200 includes any non-broker and non-dealer who purchases commodities or services from a FINRA member or its associated person. The panel found that Defendants ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. OPPENHEIMER & CO. INC. V. MITCHELL 3

could be entitled to arbitrate their claims against Oppenheimer if they could demonstrate that they transacted with Woods. Nevertheless, the panel agreed with the district court that Defendants did not transact with Woods because they purchased their investments from Woods’s associate, Michael Mooney, and not from Woods himself. The panel further rejected Defendants’ claim that their investments, through Mooney, and into an entity formed and controlled by Woods, may be attributed to Woods under an “alter ego” theory of liability. The panel held that the district court did not abuse its discretion by entering a permanent injunction. The panel rejected Defendants’ contentions that the district court erred by introducing unsupported requirements for the legal definition of a “customer” and by making factual findings that were unsupported by the record.

COUNSEL Jason D. Frank (argued) and Matthew C. McDonough, Morgan Lewis & Bockius LLP, Boston, Massachusetts; Andrew DeCarlow, Morgan Lewis & Bockius LLP, Seattle, Washington; for Plaintiff-Appellee. Roger M. Townsend (argued), Breskin Johnson & Townsend PLLC, Seattle, Washington; Craig Kuglar, Law Firm of Craig H. Kuglar LLC, Atlanta, Georgia; for Defendants-Appellants. Alan L. Rosca, Rosca Scarlato LLC, Be