Zarecor v. Morgan Keegan

(Client: Morgan Keegan)

The Firm won a motion to vacate a FINRA arbitration award rendered against one of the firm’s broker-dealer clients. The investors had moved to confirm the award following the arbitration.  The client objected that no agreement to arbitrate existed and that the FINRA arbitration panel therefore had exceeded its authority in rendering the award. The client had objected to arbitration at the outset, reserved its right to litigate rather than arbitrate, and advised the investors that they proceeded with arbitration at their peril. Rather than move the dispute to court, the investors chose to proceed with the arbitration. Although the grounds for vacating an arbitration award are “exceedingly narrow,” the trial court adopted the client’s argument and vacated the award. The investors subsequently filed suit in federal court in Little Rock, Arkansas. In response, the client filed a motion to dismiss on the merits, and the Court granted the motion. The investors then appealed to the United States Court of Appeals for the Eighth Circuit, where the matter is currently pending following oral argument in late 2014. George C. Freeman, III represented the client.