Citigroup Denied Arbitration Mulligan, Owes Broker $3.5 Million

A fired “star” broker and investment adviser for Citigroup Global Markets Inc. can keep a nearly $3.5 million arbitration award, a divided Eleventh Circuit ruled Thursday, stressing the limited nature of review of arbitration results.

Judges must defer to an arbitrator’s interpretation of the underlying contract no matter how wrong it may be, the 2-1 appeals court said, reversing a lower court judge.

Citigroup “must now live with the results” under the agreements it entered into with Christian Gherardi because the bank failed to show the arbitration panel exceeded its powers by reaching issues outside those contracts, the U.S. Court ...