Hayden

A brokerage firm lent money to a client. The loan was secured by the client’s shares in a technology company the client founded. When the market value of the corporate shares fell, the client pledged real property as additional security. The client defaulted on the loan, owing more than $25 million. The client sued the brokerage firm for alleged breach of fiduciary duty in giving financial advice, and the brokerage firm cross-complained to collect on the loan.

The parties agreed to arbitrate their dispute, and the arbitrator ruled in favor of the brokerage firm. The trial court confirmed the arbitration award over the client’s objection that the award should be vacated because the arbitrator suppressed information showing him to be disqualified to act as a neutral arbitrator. The client maintained that the arbitrator should have disclosed that he provides dispute resolution services to a bank. An arbitrator must disclose employment arrangements with a party to the proceeding, and the client argued that the bank became a party when the bank’s corporate parent acquired the brokerage firm before the arbitration award was final. The client renews this argument on appeal…