Order Granting Motion To Vacate Arbitration Award Raises Question: Is FINRA Meeting Its Obligation To Provide A Fair Process?

By Alan M. Wolper

About Broker-Dealer & Investment Adviser

Motions to vacate an adverse arbitration award are rarely granted by courts.  Indeed, that should come as no surprise to anyone inasmuch as the awards rendered at the conclusion of the arbitral process are explicitly designed to be “final.”  As a matter of both federal and state law, there are very, very few available bases on which a court may overturn an award rendered by an arbitration panel.  (In some jurisdictions, lawyers can be – and have been – sanctioned for filing a motion to vacate without a sound basis for it.)  As everyone who participates in arbitrations understands (except, perhaps, clients on the losing end of arbitrations), even errors of law and errors of fact committed by an arbitration panel are not grounds for vacatur.  By comparison, adverse decisions issued by a court can be appealed pretty much for any reason one is capable of conjuring up, even silly ones.

Last week, however, a Superior Court Judge in Fulton County, Georgia – my old stomping grounds – actually granted a motion to vacate that a customer filed after losing a FINRA arbitration he had brought against Wells Fargo Advisors.  What makes the Order remarkable is not that it was granted, a rarity, as I said, but why it was granted.

To read the rest of the post on Ulmer’s Broker-Dealer Law Corner blog, click here.