District Court Wants to Know Why FINRA Arbitration Panel Denied Freecharm Ltd.’s Securities Fraud Claim Against One Atlas Financial Group LLC
Judge Marcia G. Cooke of the U.S. District Court for the Southern District of Florida is asking why a Financial Industry Regulatory Authority arbitration panel denied Freecharm Ltd.’s breach of fiduciary duty and fraud claims against Atlas One Financial Group LLC. Cooke wants to know about the panel’s reasoning so it can make a ruling regarding the parties’ conflicting motions to modify, confirm, or vacate the award.
The court says that, Freecharm Ltd. began arbitration proceedings against associated entity Atlas One Financial Group LLC and three individuals in 2009. Freecharm accused Atlas of committing Florida statutory violations, breach of fiduciary, fraud, negligence, and other wrongdoings linked to the alleged excessive and/or unauthorized trading in a number of securities accounts.
After the FINRA panel entered an award denying Freecharm’s claims “in their entirety,” Freecharm then submitted a motion to modify or vacate, while Atlas put forward its own motion to have the award confirmed.
Freecharm is claiming that the panel went beyond its powers, exhibited partiality, ignored the law and the facts, and was prejudiced in refusing to see that Atlas allegedly concealed discovery documents. Freecharm is also challenging the credibility of certain witness testimony and discovery documents.
Although the district court has acknowledged that the FINRA panel’s decision deserves “considerable deference,” it also has found that in this instance the award does not “expressly state” the reason Freecharm’s claims were entirely denied. The court says that it needs more information so it can identify the possible evidence for the panel’s logic, as well as determine what principal of law the arbitrators allegedly disregarded. District courts are authorized to remand a case to an arbitration panel for the purpose of getting clarification about the panel’s intent when “in making an award evidences a manifest disregard of the law.”
Related Web Resources:
In Weighing Motion to Confirm, Court Asks Arbitrators to Clarify Basis of Award, Alacra Store, May 25, 2011
Atlas One Financial Group, LLC et al v. Freecharm Limited, Justia Dockets
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