Arrayago v Interactive Brokers LLC 2025 NY Slip Op 34754(U) December 8, 2025 Supreme Court, New York County Docket Number: Index No. 154844/2025 Judge: Phaedra F. Perry-Bond Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. PHAEDRA F. PERRY-BOND PART 35 Justice -------------------X INDEX NO. 154844/2025 MANUEL CHRISTIAN MOLINA ARRAYAGO, MOTION DATE 06/14/2025 Plaintiff, MOTION SEQ. NO. 002 -v- lNTERACTIVE BROKERS LLC, DECISION + ORDER ON MOTION Defendant.
-------------------X The following e-filed documents, listed by NYSCEF document number (Motion 002) 10, 11, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24,25,26,27,28,29,38,47,48,49,50,51,52,53,54,55, 56, 57, 58, 59,60,61,62,63,64,65,66,67,68,69, 70, 71, 72, 73, 74 were read on this motion to/for DISQUALIFY COUNSEL
Upon the foregoing documents, Plaintiff Manuel Christian Molina Arrayago's ("Plaintiff')
motion to disqualify Defendant Interactive Brokers LLC's ("Defendant") in-house counsel from
representing Defendant during the pendency of this litigation is denied. 1
I. Background
Plaintiff, who is self-represented, alleges Defendant committed fraud in an arbitration
proceeding brought by Plaintiff against Defendant before the National Futures Association (the
"NFA") in July of 2020. The fraud consisted of allegedly manipulated reports showing false
valuations. Plaintiff raised Defendant's alleged fraud in the underlying arbitration on December
29, 2020 (NYSCEF Doc. 15). On April 23, 2021, Arbitrator Donald L. Horwitz dismissed
Plaintiff's Complaint (NYSCEF Doc. 57). Plaintiff purportedly filed a notice of appeal of Mr.
Horwitz's decision with the Appellate Court of Illinois on or about May 4, 2021, but the appeal
1 The Court is concerned that this is not the proper venue for this action as the complaint fails to allege either party is
domiciled in New York. The complaint is silent as to where the arbitration was held and where the allegedly tortious conduct took place, but documents submitted on this motion indicate the arbitration was based in Chicago, Illinois. 154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page 1 of 5 Motion No. 002
[* 1] 1 of 5 FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
was apparently never perfected (NYSCEF Doc. 59). In September of 2023, Plaintiff submitted a
complaint regarding Defendant's alleged fraud to the United Kingdom's Financial Ombudsman
Service. On March 8, 2024, Ombudsman Paul Featherstone dismissed Plaintiff's Complaint
because according to the rules of the Financial Conduct Authority, Plaintiff's complaint was
submitted out of time. Mr. Featherstone also stated that Plaintiff was "attempting to use the
services of the Financial Ombudsman Service to re-open a dispute that has already been decided
elsewhere" (NYSCEF Doc. 61).
On April 13, 2025, Plaintiff commenced this action seeking damages based on Defendant's
alleged fraud. On May 14, 2025, the parties stipulated to an extension of Defendant's time to
answer or respond to the complaint (NYSCEF Doc. 7). The stipulation memorialized that Plaintiff
was seeking disqualification of Defendant's in-house counsel from representing Defendant and
extended Defendant's time to file its responsive pleading until 30 days after the motion to
disqualify was adjudicated.
Plaintiff filed the instant motion to disqualify on June 14, 2025. He claims disqualification
is appropriate because Defendant's general counsel, Mark G. Materna, and Defendant's chief
litigation counsel Robert W. Topp, were directly involved in orchestrating fraud in the underlying
arbitration. 2 Plaintiff also argues Defendant's in-house counsel has a conflict of interest and will
have to take positions contrary to their "own personal survival interests." Plaintiff also cites to
attorney disciplinary decisions to argue that Defendant's in-house counsel should be disqualified
based on alleged fraud and dishonesty. 3 Plaintiff further argues disqualification is necessary
because in-house counsel are necessary witnesses to this proceeding. Defendant opposes and
2 Neither of these attorneys have appeared on behalf of Defendant in this action. 3 This Court does not have jurisdiction over attorney disciplinary matters. The First Department's Attorney Grievance
Committee is the body that investigates and prosecutes attorney disciplinary matters. 154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page2 of5 Motion No. 002
[* 2] 2 of 5 FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
argues the allegations of fraud are unproven and cannot serve as a basis to disqualify counsel of
its choosing, and that the advocate witness rule does not warrant disqualification at this juncture.
Defendant also disputes that in-house counsel is conflicted.
II. Discussion
Plaintiffs motion is denied. A movant seeking disqualification bears a heavy burden
(Mayers v Stone Castle Partners, LLC, 126 AD3d 1 [1st Dept 2015]). This is because the
disqualification of counsel affects a party's federal and state constitutional rights to counsel of
their own choosing (Dietrich v Dietrich, 136 AD3d 461 [1st Dept 2016]). Disqualification of
counsel rests within the discretion of the trial court (Ferolito v Vultaggio, 99 AD3d 19, 27 [1st
Dept 2012]). The Court of Appeals, First Department, and other departments, have instructed trial
courts to examine whether a motion to disqualify is being used impermissibly as a litigation tactic
and have repeatedly denied motions to disqualify where they appear to be part of litigation
gamesmanship (see e.g. Solow v W.R. Grace & Co., 83 NY2d 303, 310 [1994] Hele Asset, LLC v
S.E.E. Realty Associates, 106 AD3d 692, 694 [2d Dept 2013]; St. Barnabas, supra; see also
HHB.K. 45th Street Corp. v Stern, 158 AD2d 395 [1st Dept 1990]). Here, the Court has concerns
that the motion is being used as an offensive tactic to impose litigation costs on Defendant by
forcing them to retain and pay outside counsel, making this litigation more costly and burdensome
for Defendant. This factor weighs against granting Plaintiffs motion.
Moreover, Plaintiffs application of conflict-of-interest rules and principles to disqualify
counsel is unavailing. An analysis of Plaintiffs allegations shows that Defendant and its in-house
counsel are not conflicted but united in interest, as Defendant and its in-house counsel have a
united interest in disproving Plaintiffs allegations of fraud (see, e.g. Twin Sec., Inc. v Advocate &
Lichtenstein, LLP, 97 AD3d 500, 500-501 [1st Dept 2012] ["At this early stage, defendants-
154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page3 of5 Motion No. 002
[* 3] 3 of 5 FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
Free access — add to your briefcase to read the full text and ask questions with AI
Arrayago v Interactive Brokers LLC 2025 NY Slip Op 34754(U) December 8, 2025 Supreme Court, New York County Docket Number: Index No. 154844/2025 Judge: Phaedra F. Perry-Bond Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. PHAEDRA F. PERRY-BOND PART 35 Justice -------------------X INDEX NO. 154844/2025 MANUEL CHRISTIAN MOLINA ARRAYAGO, MOTION DATE 06/14/2025 Plaintiff, MOTION SEQ. NO. 002 -v- lNTERACTIVE BROKERS LLC, DECISION + ORDER ON MOTION Defendant.
-------------------X The following e-filed documents, listed by NYSCEF document number (Motion 002) 10, 11, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24,25,26,27,28,29,38,47,48,49,50,51,52,53,54,55, 56, 57, 58, 59,60,61,62,63,64,65,66,67,68,69, 70, 71, 72, 73, 74 were read on this motion to/for DISQUALIFY COUNSEL
Upon the foregoing documents, Plaintiff Manuel Christian Molina Arrayago's ("Plaintiff')
motion to disqualify Defendant Interactive Brokers LLC's ("Defendant") in-house counsel from
representing Defendant during the pendency of this litigation is denied. 1
I. Background
Plaintiff, who is self-represented, alleges Defendant committed fraud in an arbitration
proceeding brought by Plaintiff against Defendant before the National Futures Association (the
"NFA") in July of 2020. The fraud consisted of allegedly manipulated reports showing false
valuations. Plaintiff raised Defendant's alleged fraud in the underlying arbitration on December
29, 2020 (NYSCEF Doc. 15). On April 23, 2021, Arbitrator Donald L. Horwitz dismissed
Plaintiff's Complaint (NYSCEF Doc. 57). Plaintiff purportedly filed a notice of appeal of Mr.
Horwitz's decision with the Appellate Court of Illinois on or about May 4, 2021, but the appeal
1 The Court is concerned that this is not the proper venue for this action as the complaint fails to allege either party is
domiciled in New York. The complaint is silent as to where the arbitration was held and where the allegedly tortious conduct took place, but documents submitted on this motion indicate the arbitration was based in Chicago, Illinois. 154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page 1 of 5 Motion No. 002
[* 1] 1 of 5 FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
was apparently never perfected (NYSCEF Doc. 59). In September of 2023, Plaintiff submitted a
complaint regarding Defendant's alleged fraud to the United Kingdom's Financial Ombudsman
Service. On March 8, 2024, Ombudsman Paul Featherstone dismissed Plaintiff's Complaint
because according to the rules of the Financial Conduct Authority, Plaintiff's complaint was
submitted out of time. Mr. Featherstone also stated that Plaintiff was "attempting to use the
services of the Financial Ombudsman Service to re-open a dispute that has already been decided
elsewhere" (NYSCEF Doc. 61).
On April 13, 2025, Plaintiff commenced this action seeking damages based on Defendant's
alleged fraud. On May 14, 2025, the parties stipulated to an extension of Defendant's time to
answer or respond to the complaint (NYSCEF Doc. 7). The stipulation memorialized that Plaintiff
was seeking disqualification of Defendant's in-house counsel from representing Defendant and
extended Defendant's time to file its responsive pleading until 30 days after the motion to
disqualify was adjudicated.
Plaintiff filed the instant motion to disqualify on June 14, 2025. He claims disqualification
is appropriate because Defendant's general counsel, Mark G. Materna, and Defendant's chief
litigation counsel Robert W. Topp, were directly involved in orchestrating fraud in the underlying
arbitration. 2 Plaintiff also argues Defendant's in-house counsel has a conflict of interest and will
have to take positions contrary to their "own personal survival interests." Plaintiff also cites to
attorney disciplinary decisions to argue that Defendant's in-house counsel should be disqualified
based on alleged fraud and dishonesty. 3 Plaintiff further argues disqualification is necessary
because in-house counsel are necessary witnesses to this proceeding. Defendant opposes and
2 Neither of these attorneys have appeared on behalf of Defendant in this action. 3 This Court does not have jurisdiction over attorney disciplinary matters. The First Department's Attorney Grievance
Committee is the body that investigates and prosecutes attorney disciplinary matters. 154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page2 of5 Motion No. 002
[* 2] 2 of 5 FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
argues the allegations of fraud are unproven and cannot serve as a basis to disqualify counsel of
its choosing, and that the advocate witness rule does not warrant disqualification at this juncture.
Defendant also disputes that in-house counsel is conflicted.
II. Discussion
Plaintiffs motion is denied. A movant seeking disqualification bears a heavy burden
(Mayers v Stone Castle Partners, LLC, 126 AD3d 1 [1st Dept 2015]). This is because the
disqualification of counsel affects a party's federal and state constitutional rights to counsel of
their own choosing (Dietrich v Dietrich, 136 AD3d 461 [1st Dept 2016]). Disqualification of
counsel rests within the discretion of the trial court (Ferolito v Vultaggio, 99 AD3d 19, 27 [1st
Dept 2012]). The Court of Appeals, First Department, and other departments, have instructed trial
courts to examine whether a motion to disqualify is being used impermissibly as a litigation tactic
and have repeatedly denied motions to disqualify where they appear to be part of litigation
gamesmanship (see e.g. Solow v W.R. Grace & Co., 83 NY2d 303, 310 [1994] Hele Asset, LLC v
S.E.E. Realty Associates, 106 AD3d 692, 694 [2d Dept 2013]; St. Barnabas, supra; see also
HHB.K. 45th Street Corp. v Stern, 158 AD2d 395 [1st Dept 1990]). Here, the Court has concerns
that the motion is being used as an offensive tactic to impose litigation costs on Defendant by
forcing them to retain and pay outside counsel, making this litigation more costly and burdensome
for Defendant. This factor weighs against granting Plaintiffs motion.
Moreover, Plaintiffs application of conflict-of-interest rules and principles to disqualify
counsel is unavailing. An analysis of Plaintiffs allegations shows that Defendant and its in-house
counsel are not conflicted but united in interest, as Defendant and its in-house counsel have a
united interest in disproving Plaintiffs allegations of fraud (see, e.g. Twin Sec., Inc. v Advocate &
Lichtenstein, LLP, 97 AD3d 500, 500-501 [1st Dept 2012] ["At this early stage, defendants-
154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page3 of5 Motion No. 002
[* 3] 3 of 5 FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
respondents appear to be presenting a unified defense. Thus, any potential conflict is speculative
at present."]).
Plaintiffs argument for disqualification under the advocate-witness rule is premature. The
party seeking disqualification of counsel under the advocate-witness rule bears a heavy burden of
establishing that the testimony of the party's attorney is necessary rather than cumulative (Segal v
Five Star Electric Corporation, 165 AD3d 613,613 [1st Dept 2018]). The movant must show that
the testimony sought is weighty, and information gleaned from the testimony is unavailable from
other sources (Segal, supra citing Campbell v McKeon, 75 AD3d 479,481 [1st Dept 2010]). Here,
Plaintiff failed to meet his heavy burden of showing that certain attorneys within Defendant's in-
house counsel legal team's testimony is necessary. Documentary evidence such as e-mails,
transactions, reports, expert opinions, and evidence submitted in the underlying arbitration may
very well be sufficient for Plaintiff to prove his allegations of fraud. As Defendant has not yet
responded to the complaint and there has been no discovery, Plaintiff has not met his heavy burden
of showing that other available evidence may be sufficient without taking the drastic remedy of
disqualifying Defendant's chosen counsel (see, e.g. Simon v Lewis, 238 AD3d 681,682 [1st Dept
2025]; Dishi v Federal Ins. Co., 112 AD3d 484 [1st Dept 2013]). Based on the current procedural
posture, and given Plaintiffs heavy burden, this branch of the motion is denied, without prejudice,
with leave to renew upon further discovery, if Defendant's counsel's testimony is truly necessary
(Dishi, supra; see also Davin v JMAM, LLC, 27 AD3d 371,371 [1st Dept 2006]).
Finally, Plaintiffs argument that Defendant's alleged fraud in the underlying arbitration
disqualifies its in-house counsel from representing it in this action is unavailing. Arbitrator
Horwitz evaluated the evidence in the underlying arbitration and considered Plaintiffs allegations
of fraud and manipulated data. After considering Plaintiffs allegations and the evidence, the
154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page4of5 Motion No. 002
[* 4] 4 of 5 FILED: NEW YORK COUNTY CLERK 12/09/2025 11:07 AM INDEX NO. 154844/2025 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 12/08/2025
arbitrator dismissed Plaintiffs complaint with prejudice. To date, there has been no finding of
fraud against Defendant, and Defendant has consistently disputed and opposed those allegations.
A litigant is not entitled to disqualify opposing counsel through allegations of fraud alone. Nor can
a litigant disqualify an entire legal department or firm by claiming one attorney's alleged fraud is
imputed to all other attorneys in the department or firm. The Court has considered the remainder
of Plaintiffs contentions and finds them unavailing.
Accordingly, it is hereby,
ORDERED that Plaintiffs motion to disqualify Defendant's in-house counsel from
representing Defendant during the pendency of this litigation is denied; and it is further
ORDERED that within thirty days of entry of this Decision and Order, Defendant shall
answer or otherwise respond to Plaintiffs amended complaint (NYSCEF Doc. 41 ); and it is further
ORDERED that if Defendant elects to serve an answer to the amended complaint, the
parties shall meet and confer and submit a proposed preliminary conference order to the court via
NYSCEF and e-mail, but in no event shall the proposed preliminary conference order be submitted
any later than February 24, 2026; and it is further
ORDERED that within ten days of entry, counsel for Defendant shall serve a copy of this
Decision and Order, with notice of entry, on all parties via NYSCEF.
This constitutes the Decision and Order of the Court.
d~ID~ DATE Q1~UL HON. PHAEDRA F. PERRY-BOND, J.S.C.
CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION
GRANTED ~ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
154844/2025 MOLINA ARRAYAGO, MANUEL CHRISTIAN vs. INTERACTIVE BROKERS LLC Page 5 of 5 Motion No. 002
[* 5] 5 of 5