Trump Family’s Effort to Compel Arbitration of Fraud Case Denied

On April 8, 2020, a federal court denied the attempt of Donald Trump, his immediate family, and The Trump Corporation to compel arbitration of the fraud case pending against them in the Sothern District of New York. The case, filed in the fall of 2018, alleges the Trumps defrauded investors into purchasing memberships in a multi-level marketing scheme called ACN.  The Trumps had argued that the court should stay the fraud case in favor of individual arbitration based on agreements that the investors had signed with ACN. The court denied the motion on the grounds that the Trumps and ACN were never sufficiently connected such that the investors would have understood that any of their contractual obligations with ACN would correspond to obligations with the Trumps.

A full copy of the decision can be found here.  Reporting on the decision in Reuters can be found here and on Bloomberg Quint here.

The investors are represented by ECBA attorneys Andrew G. Celli, Jonathan S. Abady, Matthew D. Brinckerhoff, O. Andrew F. Wilson, Katherine Rosenfeld, Sam Shapiro, David Berman, and Nick Bourland.

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