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In California, When Can a FINRA Arbitration Award be Vacated by a Court?

Investors often turn to FINRA arbitration to resolve disputes with brokers or financial advisors, seeking a faster, more cost-effective alternative to traditional litigation. However, what if you are dissatisfied with the arbitrators’ decision? Can you vacate an arbitration award in California? At Bakhtiari & Harrison, we represent investors and navigate complex legal scenarios. In this blog, we’ll explore when a court in California can vacate a FINRA arbitration award, and the steps involved in filing a motion to vacate.

Understanding FINRA Arbitration

The Financial Industry Regulatory Authority (FINRA) provides a forum for resolving disputes between investors and brokers or brokerage firms. The process involves presenting your case to an arbitration panel, which then makes a binding decision. While arbitration is generally faster and less costly than litigation, the arbitrators’ decision is typically final and binding.

Grounds for Vacating a FINRA Arbitration Award in California

Although FINRA rules make it challenging to overturn an arbitration award, there are specific grounds under which a court may vacate an award. In California, the grounds for vacating an arbitration award are outlined under the California Code of Civil Procedure 1286.4:

  1. Evident Partiality or Corruption If there is clear evidence that an arbitrator was biased or corrupt, a court may vacate the arbitration award. This includes any undisclosed conflicts of interest that could affect the arbitrator’s impartiality.
  2. Misconduct If the arbitration panel is found to have engaged in misconduct, such as refusing to hear pertinent evidence or acting in a way that prejudices one party, the award may be vacated. Misconduct can also include procedural errors that significantly impact the fairness of the arbitration.
  3. Exceeding Powers Arbitrators must act within the scope of their authority. If the arbitration panel exceeds its powers or issues a decision that goes beyond the matters submitted for arbitration, a court may vacate the award.
  4. Fraud or Undue Means If the award was obtained by fraud or undue means, such as through falsified evidence or deceptive practices, a court can vacate the arbitration award.

Filing a Motion to Vacate

If you believe that your case meets one of the grounds for vacating a FINRA arbitration award, the next step is to file a motion to vacate. Here’s an overview of the process:

  1. Consult with an Experienced Attorney It is crucial to seek legal counsel from an experienced attorney who understands FINRA rules and the intricacies of arbitration. At Bakhtiari & Harrison, we have years of experience representing clients in arbitration and court proceedings.
  2. Draft and File the Motion Your attorney will draft a detailed motion to vacate, outlining the specific grounds and supporting evidence. This motion must be filed within 100 days of the arbitration award date, as stipulated by the California Code of Civil Procedure 1286.4.
  3. Present Your Case in Court The court will review the motion and determine whether there is sufficient evidence to vacate the arbitration award. Your attorney will present your case, arguing why the award should be vacated based on the outlined grounds.

Accessing FINRA Arbitration Awards Online

To understand the context of your case and the potential for vacating an award, it can be helpful to review other FINRA arbitration awards online. These publicly available awards provide insights into the decisions made by arbitration panels and the reasoning behind them.

Why Choose Bakhtiari & Harrison?

At Bakhtiari & Harrison, we are committed to protecting your rights and ensuring that you receive fair treatment in the arbitration process. Our team of skilled attorneys has a deep understanding of FINRA rules and extensive experience in handling motions to vacate arbitration awards. We are dedicated to providing the highest level of representation to help you achieve the best possible outcome.

If you need assistance with a FINRA arbitration or believe you have grounds to vacate an arbitration award, contact us today. Visit our website at or call us at (310) 499-4732 to schedule a consultation.