Arbitrators Are Immune for Decision to Disqualify Representative in FINRA Arbitration

In Sacks v. Dietrich, an investor hired a non-attorney, Sacks, to represent him in a securities arbitration administered by the Financial Industry Regulatory Authority (“FINRA”). FINRA, a self-regulatory organization whose rules are approved by the Securities and Exchange Commission. The arbitrators disqualified Sacks, who had previously been barred by the securities industry, from representing the investor. Sacks filed suit against the arbitrators.
The 9th Circuit Court of Appeals ruled that Sacks’ lawsuit was improper because the arbitrators were protected by arbitral immunity. The doctrine of arbitral immunity provides that arbitrators are immune from civil liability for decisions they render in an arbitration. The case against the arbitrators was dismissed.
The Los Angeles based firm of Heimanson & Wolf represents investors against their broker/dealers in Court and in the FINRA arbitration setting.