• $1,102,193 in compensatory damages based upon unpaid and owed wages with 9% interest from November 1, 2012, until paid in full'
• $247,532 in attorneys' fee per New York Labor Law; and
• $21,349.25 in costs.

In connection with an investigation being conducted by FINRA's Department of Market Regulation ("Market Regulation"), Ackerman refused to appear for testimony that was requested pursuant to FINRA Rule 8210. Ackerman's refusal to appear and testify violated FINRA Rules 8210 and 2010.

In sum, the arbitrators did not necessarily make the same determinations on the admission of evidence and timing that this Court would have made if considering the issues de novo. But a petition to vacate is not an occasion for de novo review. See Wallace, 378 F.3d at 189.

According to Petitioners, Mr. Ackerman committed perjury in front of the arbitration panel by testifying, in response to the arbitrators' questions, that a FINRA investigation into some of his bond transactions was not still pending, and that FINRA took no action regarding these trades. See Pet. Letter at 3-4. In fact, Petitioners state, the FINRA investigation was still pending, and on February 22, 2016, Mr. Ackerman executed a Letter of Acceptance, Waiver and Consent with FINRA, in which he acknowledged that he had refused to appear for testimony in front of FINRA and agreed to be barred "from association with any FINRA member in any capacity." See Pet. Letter at 4; Pet. Letter, Exhibit A, Dkt. 23-1. Petitioners assert that Mr. Ackerman's allegedly false testimony bolstered his credibility in front of the arbitration panel, making them more likely to accept his assessment of the compensation he believed he was owed . . .

crucial issue is whether any allegedly false testimony by Mr. Ackerman was material to the arbitration panel's award of damages for unpaid wages, which Petitioners are contesting in the instant petition to vacate the award. The Court finds that Mr. Ackerman's testimony regarding the FINRA investigation was not material to the award. In particular, the Court finds implausible Petitioners' suggestion that Mr. Ackerman's responses to questions about the FINRA investigation materially bolstered Mr. Ackerman's credibility in making an unpaid wages claim to which the FINRA matter does not relate. The Court therefore declines to permit Respondent to amend its petition to include as a ground that the arbitration award was procured by means of fraud. The Court hence denies Petitioners' petition to vacate the award in its entirety. Since the Court has decided not to vacate or modify the arbitration award, the Court must grant Respondent's petition to confirm the award, and so it hereby does. See 9 U.S.C. § 9.

We hold that to vacate an arbitration award on the ground that the award was fraudulently procured, the petitioner must demonstrate the fraud was material to the award. That is, there must be a nexus between the alleged fraud and the decision made by the arbitrators. The petitioner, however, need not demonstrate that the arbitrators would have reached a different result. In this case, Odeon failed to establish that Ackerman's alleged perjury had any impact on the arbitration award. The district court therefore correctly denied the petition to vacate.  

The district court also denied Ackerman's request for attorneys' fees incurred in defending the arbitration award, and Ackerman cross‐appeals from that denial. We agree with Ackerman that the district court applied the wrong legal standard in denying his fees request. The district court based its denial on the ground that the petition to vacate was not unjustified, such that the court's invocation of its inherent powers to make a fees award was unwarranted. However, New York law provides statutory authority for Ackerman's fees request. Where, as here, an employee prevails against an employer on a claim for unpaid wages, New York law mandates that the employee recover "all reasonable attorney[s'] fees." N.Y. Labor Law § 198(1‐a).  We therefore vacate the denial of attorneys' fees and remand for further proceedings consistent with this opinion.

[W]hile the petition to vacate was pending, Ackerman had received a letter from FINRA requesting a second OTR regarding his 2011 trades to be held at its offices in Maryland. The FINRA letter came roughly one month after the arbitration ended. By then, Ackerman no longer worked as a trader and had moved to California. Ackerman declined to travel to Maryland for a second OTR, and instead accepted a ban from working as a securities trader. To that end, he entered into a letter of acceptance, waiver, and consent ("AWC") with FINRA.

Odeon learned of the AWC in March 2016, and sought to amend its petition to vacate to add fraud as an additional ground for vacatur. Odeon argued that the second request for an OTR established that Ackerman committed perjury during the arbitration. Specifically, Odeon argued that Ackerman "misled the arbitration panel concerning the status and outcome of a FINRA regulatory investigation into his trading activity" by falsely testifying that "(i)  FINRA affirmatively told him that there was ‘nothing improper' about his trading activity, and (ii) the FINRA investigation into his activities was closed." App'x at 1552. Ackerman opposed the motion, arguing his testimony before the arbitration panel was truthful.

[N]othing in the award indicates that the arbitrators relied heavily on Ackerman's truthfulness in making its award. Indeed, given that Ackerman sought damages in excess of five million dollars and received roughly one‐fifth of that amount, and that Ackerman prevailed on just one of his eleven claims, it appears the arbitrators took most of what Ackerman said with a grain of salt. Accordingly, we affirm the district court's finding that the alleged perjury was immaterial to the arbitration award.

[A]ckerman sought fees pursuant to the district court's statutory powers under New York Labor Law, not its equitable powers. New York Labor Law § 198(1‐a) provides in relevant part that "[i]n any action instituted in the courts upon a wage claim by an employee . . .  in which the employee prevails, the court shall allow such employee to recover . . .  all reasonable attorneys' fees." The arbitrators specified Ackerman's award was for "compensatory damages based on unpaid wages" and attorneys' fees "pursuant to New York Labor Law." App'x at 46‐47.  

Odeon argues that because Section 198(1‐a) does not specifically state that that fees are due in an action to confirm or enforce an arbitration award, it does not mandate fees here. We disagree. New York's Civil Practice Law and Rules define "action" to include a "special proceeding," N.Y.C.P.L.R. § 105(b). Applications to confirm, vacate, or modify arbitration awards are made through special proceedings . . .

Neither party asked for a reasoned decision from the arbitration panel. Accordingly, the award does not provide any sort of rationale or explanation for how the panel arrived at its damages award of $1,102,193.00. There is simply no basis in the record to find that Ackerman's testimony regarding the FINRA investigation played any role in the arbitrators' award on his unpaid wages claim.

Background & Discussion

FINRA is amending its Customer Code and Industry Code to require arbitrators to provide an explained decision at the parties' joint request. The absence of explanations in awards has been a common complaint of non-prevailing parties in FINRA's arbitration forum, especially customers and associated persons. The amendments are intended to address this complaint and increase investor confidence in the fairness of the arbitration process.

An explained decision is a fact-based award stating the general reasons for the arbitrators' decision. It does not need to include legal authorities and/or damage calculations. Normally, the arbitrators will be resolving the entire matter; thus, the explained decision will address all the claims asserted by the parties. However, the parties may request that an explained decision address only certain claims.

Parties will be required to submit any joint request for an explained decision no later than 20 days prior to the first scheduled hearing date.

The chairperson of the arbitration panel will write the explained decision and will receive an additional honorarium of $400. Once the decision is drafted, the other arbitrators will participate in completing the decision as provided in Rules 12904(a) and 13904(a). As with all other awards, the arbitrators will continue to be permitted to concur, concur in part, dissent or dissent in part. The panel may allocate the cost of the honorarium to one party, or may allocate it between or among all parties. Arbitrators will continue to be permitted to decide, on their own, to write an explained decision. If the panel or a member of the panel decides to write an explained decision in the absence of a joint request, FINRA will not pay an additional honorarium to any panel member.

Parties will not be able to require explained decisions in simplified arbitrations that are resolved without a hearing or in default proceedings. Explained decisions are not appropriate in either of these situations because of the abbreviated nature of the proceedings.

The amendments become effective on April 13, 2009, and will apply to all arbitration cases in which an initial prehearing conference has not been held, or waived by the parties, by the effective date.