Ninth Circuit Refuses to Vacate FINRA Arbitration Award Because Proceedings Were Not Recorded

From JD Supra:

The Ninth Circuit Court of Appeals refused to vacate an arbitration award even though the proceedings were not recorded. In Uddin v. TD Ameritrade, Inc., 2026 WL 982854 (9th Cir. Apr. 13, 2026) (Not for Publication), the appellant appealed an award by the Financial Industry Regulatory Authority (“FINRA”) to TD Ameritrade, asserting that the apparently inadvertent failure of the FINRA panel to record or transcribe the proceedings, as required by the arbitration agreement, deprived him of a fundamentally fair hearing.

But the panel ruled that under the Federal Arbitration Act, a court may vacate an arbitration award where the award was procured by corruption, fraud or undue means; where there was evident partiality or corruption in the arbitrators; where a party was “prejudiced” by the arbitrators’ misconduct or misbehavior; or where the arbitrators exceeded their powers.

The court ruled that even if the inadvertent failure to record the proceedings amounted to “misbehavior,” Uddin failed to show how his rights were prejudiced by an absence of a transcript or recording. The Ninth Circuit therefore affirmed the district court’s decision to confirm the FINRA award.

Why It Matters: This decision demonstrates the difficulty in convincing the federal courts to overturn an arbitration award. Here, even a significant failure by the arbitration panel to adhere to the terms of the arbitration agreement was not deemed sufficient grounds for vacating the award.

The attorneys at Sallah Astarita & Cox, LLC are former SEC Staff Attorneys and brokerage firm counsel, with over 100 years of collective experience. If you have received a subpoena from the SEC, a document request from FINRA, or have a dispute with a brokerage firm, call 212-509-6544 for a free consultation. The firm represents investors and financial professionals nationwide.