Justice Eileen Bransten
Rockwell Global Capital moved to vacate an arbitration award rendered by an arbitrator in a Financial Industry Regulatory Authority (FINRA) arbitration. Rotman, who initiated the underlying arbitration by filing a statement of claim with FINRA, consented to vacatur. Rockwell claimed as their counterclaim was a pleading that increased the amount in dispute to over $25,000, FINRA should have stopped administering the arbitration under Rule 12800, providing for a simplified arbitration without a hearing and with only one arbitrator, and followed the regular provisions of FINRA code, providing for discovery and a hearing, among other things. Rockwell argued the award should be vacated as the arbitrator and FINRA staff exceeded their power by disregarding FINRA rules and failing to remove the arbitration from a simplified procedure. The court agreed noting while Rockwell’s counterclaims in the pleading increased the amount in dispute to over $25,000, the arbitrator and FINRA staff did not reclassify the arbitration to one under the regular provisions, thus exceeded their authority by failing to administer the arbitration under FINRA’s own rules and procedures. As such, the court concluded vacatur was warranted.
