Ghayoori v. Cobra Trading Inc, 2:25-cv-00021

Arash Ghayoori, a customer at Cobra Trading, Inc., established a margin trading account and suffered a significant negative balance allegedly due to unauthorized trades and a large withdrawal.
Cobra initiated FINRA arbitration to recover the negative balance following alleged attempts to contact and serve Ghayoori, who had relocated and changed contact details.
Arbitration materials were served via FINRA’s DR Portal, email, and mailed to listed addresses; attempts at personal service were unsuccessful.
The FINRA panel ruled service was proper and, after a hearing Ghayoori did not attend, awarded Cobra $353,913.50 plus interest and costs.
Ghayoori petitioned to vacate the arbitration award in federal court, arguing improper service and venue, and that arbitrators exceeded their authority.
Cobra sought to confirm the award under the Federal Arbitration Act (FAA).

Issue	Ghayoori's Argument	Cobra's Argument	Held
Whether Ghayoori received adequate notice of the case	Service was deficient, used a defunct email, thus deprived of fair notice and participation	Service complied with FINRA rules and due process; multiple reasonable attempts were made	Service was proper; due process met
Whether venue for arbitration was improper	Venue was improper and prejudiced his rights	Venue selection was proper under FINRA rules (closest to last known residence)	Venue was proper; no prejudice shown
Whether arbitrators exceeded their authority or disregarded the law	Service and venue defects meant panel lacked jurisdiction	Panel acted within rules and authority; no manifest disregard for law	Authority not exceeded; no manifest disregard
Whether additional grounds warranted vacatur or continuance	Default judgment, res judicata, waiver, cumulative errors, need for discovery	Award was not default, no relitigation, counterclaim restated existing request, proper process	No merit; all additional motions denied

Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987 (9th Cir. 2003) (Judicial review of arbitration awards is extremely limited under the FAA)
Bosack v. Soward, 586 F.3d 1096 (9th Cir. 2009) (Vacatur only if arbitrators act completely irrationally or manifestly disregard the law)
United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (Due process requires notice reasonably calculated to inform, not actual notice)
Gingiss Int’l, Inc. v. Bormet, 58 F.3d 328 (7th Cir. 1995) (Inadequate notice is not a valid basis for vacating an arbitration award under the FAA)