[DO NOT PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 23-10232

Non-Argument Calendar

____________________

MORGAN STANLEY SMITH BARNEY LLC, 

MORGAN STANLEY SMITH BARNEY FINANCING LLC, 

Plaintiffs-Appellees,

versus

IZHAR SHEFER, 

Defendant-Appellant.

____________________

Appeal from the United States District Court

for the Southern District of Florida

D.C. Docket No. 1:22-cv-21542-BB

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 1 of 8
2 Opinion of the Court 23-10232

____________________

Before WILLIAM PRYOR, Chief Judge, and WILSON and LUCK, Circuit Judges.

PER CURIAM:

Izhar Shefer appeals the denial of his motion to vacate the 

arbitration award entered against him and in favor of Morgan Stanley Smith Barney LLC and Morgan Stanley Smith Barney Financing LLC. After Shefer resigned from his position as a financial advisor in 2017, Morgan Stanley commenced arbitration proceedings 

to recover $767,367.70 owed on eight promissory notes executed 

by Shefer during his employment. Shefer filed a counterclaim. The 

arbitration panel dismissed his counterclaim without prejudice as a 

sanction and permitted him a hearing on his motion to reinstate his 

counterclaim. The panel denied his motion. Shefer argues that the 

panel violated the Federal Arbitration Act by prohibiting him from 

filing a reply for his motion to reinstate, dismissing his counterclaim without first imposing lesser sanctions, and sanctioning him 

for the conduct of his attorney and spouse, Nera Shefer. We affirm.

In reviewing the denial of a motion to vacate an arbitration 

award, we review findings of fact for clear error and legal conclusions de novo. Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1321 

(11th Cir. 2010). The presumption under the Act is that “arbitration 

awards will be confirmed, and federal courts should defer to an arbitrator’s decision whenever possible.” Id.

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 2 of 8
23-10232 Opinion of the Court 3

Section 9 of the Act provides that, upon application of any 

party to the arbitration, “the court must confirm the arbitrator’s 

award unless it is vacated, modified, or corrected in accordance 

with sections 10 and 11 of the statute.” Id.; see 9 U.S.C. § 9. Section 

10 of the Act permits vacatur of arbitration awards in four narrow 

circumstances:

(1) where the award was procured by corruption, 

fraud, or undue means;

(2) where there was evident partiality or corruption 

in the arbitrators, or either of them; 

(3) where the arbitrators were guilty of misconduct in 

refusing to postpone the hearing, upon sufficient 

cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other 

misbehavior by which the rights of any party have 

been prejudiced; or

(4) where the arbitrators exceeded their powers, or so 

imperfectly executed them that a mutual, final, and 

definite award upon the subject matter submitted 

was not made.

9 U.S.C. § 10. 

Shefer failed to establish any statutory ground for vacating 

the award. See id. We disagree with Shefer’s assertion that the arbitration panel is guilty of misconduct, id. § 10(3), for refusing to allow him to file a reply to Morgan Stanley’s response to his motion 

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 3 of 8
4 Opinion of the Court 23-10232

to reinstate his counterclaim. Shefer filed his counterclaim in January 2018. Over a year later, Shefer obtained leave to file an 

amended counterclaim, and Morgan Stanley agreed to a discovery 

extension because the Shefers’ son was ill. The amended counterclaim alleged more than a dozen claims and requested $13.7 million 

total in compensatory and punitive damages. At the several-day

hearing in July 2021, during her redirect examination of Shefer, 

Nera asked to withdraw as counsel due to disagreements over strategy. Shefer told the panel that he was discharging Nera and assured 

the panel that he had already found another attorney to continue 

the proceedings the next day. The panel ordered substitute counsel 

to appear the next morning, assessed fees against Shefer for the 

last-minute adjournment, and dismissed his counterclaim without

prejudice. Nevertheless, the panel explained that it would hear argument the next day from Shefer’s substitute counsel regarding

why his counterclaim should be reinstated. But the next day, Nera 

told the panel that substitute counsel, who was Shefer’s 

brother-in-law, could not represent Shefer due to a conflict identified late the previous evening. After Nera requested a continuance, 

Morgan Stanley moved to dismiss the counterclaims with prejudice for violating the panel’s order and failing to notify Morgan 

Stanley of the conflict. The panel decided that Nera would continue to represent Shefer and ordered her to file a motion to reinstate his counterclaim within 48 hours. It provided Morgan Stanley 

a right of response but warned Shefer that it would receive no reply. 

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 4 of 8
23-10232 Opinion of the Court 5

The arbitration panel is not “guilty of misconduct,” id., for 

not permitting Shefer to reply to Morgan Stanley’s response to his 

motion to reinstate. Although Shefer argues that he was entitled to 

a reply because Morgan Stanley’s response raised “new contentions” about Nera’s performance—including that she failed to appear at or cancelled at least four appearances, failed to file various 

stipulations and witness subpoenas, and belatedly identified new 

witnesses—the record establishes that the panel was familiar with 

the reasons Nera provided, most of which concerned family circumstances, travel, and weather. The record confirms that the 

panel had good cause to expedite consideration of his motion to 

reinstate his counterclaim because his repeated failures to comply 

with directives caused the panel and Morgan Stanley undue delays. 

For example, at the hearing on July 14, 2021, Nera told the 

panel that she and Shefer were unavailable to participate in the 

hearing due to a storm that interrupted their power and internet.

That afternoon, Shefer testified for three hours before asking, during his cross-examination on the issue of damages, to adjourn because he needed to rest. Later, it was disclosed that Shefer instead 

met with his damages expert to discuss an updated expert report

on that issue. The next day, the panel permitted an early adjournment due to Nera being “extremely overwhelmed” and needing a 

“long break.” And the next day, the panel permitted several more 

breaks while Nera and Shefer decided whether to bring in substitute counsel. Shefer identifies no misconduct by the panel. Id.

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 5 of 8
6 Opinion of the Court 23-10232

Shefer argues that the arbitration panel exceeded its powers, 

id. § 10(4), by immediately resorting to dismissing his counterclaims as a sanction without first providing warnings or lesser sanctions. We disagree. The rules provide that a panel has broad discretion to craft sanctions for a party’s failure to comply with rules; indeed, the panel “may dismiss a claim, defense or arbitration with 

prejudice as a sanction for material and intentional failure to comply with an order of the panel if prior warnings or sanctions have 

proven ineffective.” Financial Industry Regulatory Authority 

(“FINRA”) Rule 13212(c). The record contains evidence of sanctionable conduct by Nera that extended from several failures to attend pre-hearing conferences and timely file witness lists and briefs, 

as required by the FINRA rules, to disregarding directives by the 

panel to file her exhibit stipulations, failing to confirm witness 

schedules, belatedly identifying a new witness, calling witnesses 

that she previously confirmed would not testify during the hearing, 

and failing to timely produce expert reports, as required by the 

FINRA rules. See, e.g., FINRA Rules 13208, 13512, 131514; see also 

FINRA Rule 13212(a) (providing that the panel may impose sanctions for failing to comply with “any provision in the Code.”).

The record refutes Shefer’s argument that the panel provided no warnings or sanctions before dismissing his counterclaim

with prejudice. The panel’s first sanction occurred on July 16, 2021, 

several days into the hearing after the Shefers caused multiple delays. After Nera asked during Shefer’s testimony to withdraw from 

the representation, the panel sanctioned Shefer by assessing fees 

against Shefer for the last-minute adjournment and ordering 

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 6 of 8
23-10232 Opinion of the Court 7

substitute counsel to appear the next day. Although the panel also 

dismissed Shefer’s counterclaim, it did so without prejudice and 

clarified that substitute counsel would be permitted to argue the 

next day for reinstatement of the counterclaim. After the Shefers 

still failed to comply with the order for substitute counsel to file a 

notice of appearance and failed to notify opposing counsel of the 

conflict, Morgan Stanley moved for dismissal with prejudice of the 

counterclaim. But the panel provided Shefer a final opportunity at

arbitrating his counterclaim by ordering him to file a motion to reinstate the counterclaim. After a hearing on that motion, the panel

declined to reinstate the counterclaim and dismissed it with prejudice. Moreover, the panel explained that it received his “pleadings, 

testimony, and evidence” but that his “request for damages [was] 

unpersuasive” and that it was “highly improbable [that] he would 

have prevailed on his [c]ounterclaim under the best circumstances.” The panel did not exceed its powers by dismissing 

Shefer’s counterclaim after providing him several opportunities to 

conform to its directives, particularly in the light of the series of 

delays and uncertainty that the breakdown of his relationship with 

his attorney-spouse caused the panel and opposing counsel. See 9 

U.S.C. § 10(4).

Shefer also argues that the panel exceeded its powers, id., by

sanctioning him for conduct solely attributable to his attorney-spouse because “there was no indication that [Shefer himself] 

played any role in his counsel’s supposedly problematic conduct.” 

We discern no error. At a minimum, the record establishes that 

Shefer’s own conduct—including requesting an early adjournment 

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 7 of 8
8 Opinion of the Court 23-10232

during his testimony due to fatigue to instead consult with experts 

on the subject matter of his testimony as well as deciding to discharge his attorney-wife during his testimony—contributed to the 

panel’s resort to sanctions. Shefer identifies no reason not to defer 

to the arbitrator’s decision. See Frazier, 604 F.3d at 1321. 

We AFFIRM the order confirming the arbitration award in 

favor of Morgan Stanley and denying Shefer’s motion to vacate the 

award.

USCA11 Case: 23-10232 Document: 57-1 Date Filed: 05/20/2024 Page: 8 of 8