On January 8, 2026, Financial Industry Regulatory Authority (FINRA) issued a letter in Estate of Lovejoy Duryea and Ella Duryea Trust v. Stifel, Nicolaus & Co., Inc. (FINRA Arbitration No. 25‑02274) granting respondent Stifel, Nicolaus & Co., Inc.’s (“Stifel”) request to remove two potential arbitrators from the arbitrator ranking lists who previously awarded “substantial damages and attorneys’ fees” against Stifel in related matters.  The FINRA letter surfaced publicly as an exhibit in the Southern District of Florida,[1] where Stifel is seeking to overturn a separate FINRA arbitration award against it for $133 million.

FINRA’s determination is based on FINRA Rule 12407, which governs when an arbitrator may be removed before the first hearing session begins.  The rule requires the FINRA Director to grant removal “if it is reasonable to infer” that an arbitrator is “biased, lacks impartiality, or has a direct or indirect interest in the outcome of the arbitration.”  The bias must also be “definite and capable of reasonable demonstration, rather than remote or speculative.” 

Applying that standard, FINRA concluded the arbitrators were biased or lacked impartiality because they each previously awarded substantial damages and attorneys’ fees against Stifel in proceedings involving “the same Respondent, the same financial advisor, the same supervisors, and the same products.”  Both arbitrators were removed from the list of candidates on the ranking form as a result. 

The decision provides support for a party’s ability to challenge arbitrators in serial or related matters involving the same product or broker.  Indeed, it may be difficult to obtain a fair mindset from an arbitrator who previously heard and awarded damages and fees in a case involving the same firm, broker, or product.  The FINRA letter involved similarities in all three these categories and certainly supports removing potential arbitrators in that instance. 

While the impact the letter will have on future matters remains to be seen, it underscores the importance of diligent assessment in the arbitrator ranking process and potential biases of the candidates for FINRA arbitration panels.