
    G. K. Scott & Co. et al., Respondents, v Susan Kross et al., Appellants.
    [634 NYS2d 466]
   —Order, Supreme Court, New York County (Edward Lehner, J.), entered on June 17, 1994, which, inter alia, granted the individual petitioners’ application to stay arbitration, is unanimously reversed, on the law, and the petition is denied, without costs.

Appeal from the order of the Supreme Court, New York County (Edward Lehner, J.), entered on August 24,1994, which denied respondents-appellants’ motion for reargument or renewal, is unanimously dismissed as academic in light of the foregoing, without costs.

Petitioners John Kevorkian and George Kevorkian are individual registered representatives and are alleged to be "controlling persons” of G. K. Scott & Co., in which appellants maintained retail brokerage accounts. Appellants commenced an arbitration proceeding against G. K. Scott and against John Kevorkian and George Kevorkian charging stock price manipulation in thinly traded issues, where Scott allegedly controlled the market by allegedly exercising prearranged trades and discouraging sales orders in issues sold by G. K. Scott to appellants. The demand for arbitration also names John Kevorkian and George Kevorkian as respondents on the ground that they are controlling persons under section 20 (a) of the Securities Exchange Act of 1934 (15 USC § 78t [a]), and are therefore subject to arbitration pursuant to section 12 (a) of the National Association of Securities Dealers Code of Arbitration Procedure. The Supreme Court granted the petition to stay arbitration on the ground that neither George Kevorkian nor John Kevorkian were directly involved in handling appellants’ accounts. This was error. Based upon the prima facie showing in this record that George Kevorkian and John Kevorkian are "controlling persons” of G. K. Scott, and the allegations that appellants were injured by their allegedly fraudulent activities, George Kevorkian and John Kevorkian are proper parties to the arbitration (see, McMahan Sec. Co. v Forum Capital Mkts., 35 F3d 82 [2d Cir 1994]). Concur—Murphy, P. J., Asch, Nardelli and Mazzarelli, JJ.  