Arbitrators are not in manifest disregard of the law, where a question of fact exists that the Panel might have resolved in a number of ways
First of Michigan Corp. v. Mansour, No. 228521 (Mich. App., 5/17/02).
Award Challenge * Confirmation of Award * Manifest Disregard * Exceeding Powers * Undue Means * Attorney Fees.
.Mansour, a customer of First of Michigan, filed an arbitration against First of Michigan and Patrick Jordan, his registered representative. The Arbitrators awarded compensatory damages of $123,940.50, plus interest, costs, and attorney fees of $54,000 (NASD ID #98-00761, Detroit, 3/23/00).
Petitioner seeks to set aside the Award under the theory of manifest disregard of the law on several issues. The Court adopted the definition of manifest disregard in the Merrill v. Bobker case (808 F.2d 930 (2nd Cir. 1986)), i.e., the arbitrator appreciates the existence of a clearly governing legal principle but decides to ignore or pay no attention to it. In each instance, the Court decides that there was insufficient evidence to find manifest disregard. Instead, a question of fact existed on the issues of reasonable reliance and customer ratification. Because the arbitrators reasonably could have resolved these issues in Mansours favor, FOM has failed to show that the arbitrators acted with manifest disregard . (SLC Ref. No. 2002-22-02)
Copyright 2000-2002 Securities Arbitration Commentator, Inc. P.O. Box 112, Maplewood, NJ 07040; t: 973-761-5880 f: 973-761-1504. Materials denoted with a SAC Reference No. (e.g. SAC Ref. No. 99-01-001) are on hand at SAC and may be obtained by calling the Securities Arbitration Commentator, or by email to email@example.com. The Securities Arbitration Commentator is the leading publication for securities arbitration news and information and maintains the most complete database of arbitration awards available anywhere. For more information regarding their services, visit their website at www.sacarbitration.com
Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.