A former employee has accused a financial services firm of fraudulently procuring an arbitration award. Richard McCollam filed a complaint against Royal Alliance Associates, Inc. in the Court of Appeal of the State of California, First Appellate District, Division Three on September 12, 2024.
Richard McCollam, who was employed by Royal Alliance as a broker and registered representative with the Financial Industry Regulatory Authority (FINRA), claims that his termination in August 2010 was based on fabricated evidence intended to frame him as a scapegoat for the company's illicit conduct. McCollam's petition to vacate the arbitration award issued by FINRA in May 2022 was denied by the superior court on September 27, 2023. He alleges that Royal Alliance violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and FINRA Rule 2010 during investigations conducted between 2010 and 2017.
The arbitration panel ruled against McCollam, denying his claims entirely and ordering him to pay $30,636 in compensatory damages to Royal Alliance. In response, McCollam filed a petition in August 2022 to vacate the award on grounds of corruption and fraud. He argued that Royal Alliance had used fabricated evidence during both his termination and the arbitration process. Additionally, he claimed that expert testimony from Leslie Ayers was improperly admitted because she was not designated as an expert witness prior to the hearing.
Royal Alliance opposed McCollam’s petition, arguing that only extrinsic fraud could justify vacating an arbitration award and that no such evidence had been presented. They also disputed any impropriety regarding witness testimony. The superior court sided with Royal Alliance, stating that McCollam failed to demonstrate due process violations or extrinsic fraud that would have prevented a fair hearing.
McCollam appealed this decision but faced jurisdictional challenges since orders denying petitions to vacate arbitration awards are generally not appealable under California law unless accompanied by a judgment confirming the award. Despite procedural complexities and arguments over whether Ayers's testimony constituted undue means or fraud, the appellate court found no basis for overturning the lower court's decision.
McCollam is seeking judicial relief including vacation of the arbitration award based on allegations of fraudulent procurement through fabricated evidence and improper witness testimony. However, both lower courts have upheld the original arbitration ruling due to insufficient proof of extrinsic fraud or procedural unfairness.
Representing parties include Tucher P.J., Fujisaki J., Petrou J., with case ID A169199.