WASHINGTON (AP) _ An arbitration panel has ordered Shearson Lehman Hutton to pay damages totaling more than $1 million to three Oklahomans who claimed their broker made unuathorized trades and churned their accounts.

An arbitration panel of the National Association of Securities Dealers ordered Shearson to pay $994,766 in compensatory and punitive damages and lawyers' fees to Temple, Okla. farmer Walter Earl Cox and his wife, Ardenia F. Cox.

In a decision late last month, disclosed Monday, the panel also awarded separately a total of $60,694 in damages and fees to Mrs. Cox and her mother, Cuba E. Read, of Comanche, Okla.

The toltal compensatory damages of $213,864 were trebled by claims made by the Coxes under the civil provisions of the federal racketeering laws.

Both awards came in response to claims made against one-time Shearson registered representative Lindy Kent Ridinger of Wichita Falls, Texas.

The Coxes' lawyer, Frank Lewis, of Phoenix, Ariz., said the decision was the first he knew of where both punitive and treble damages were awarded as well as attorney's fees.

The NASD, which oversees the over-the-counter stock market, also supplies the majority of arbitrators for brokerage-client disputes: more than 3,600 case last year, compared to 1,100 handled by the New York Stock Exchanges and about 100 by other groups.

The three customers alleged in a complaint first filed in August 1988, that Ridinger and Shearson ''engaged in unauthorized trading of their accounts; that their trading accounts were churned and that the trades placed in their accounts were highly speculative in nature.''

Shearson denied the accusations and Ridinger, who was fired June 2, 1986, never responded to the charges, according to documents of the NASD.

Churning, which is illegal under Securities and Exchange Commission rules, is unnecessary trading in a client's account, which increases the broker's commission.

Ridinger was formally censured by the NASD, barred from associating with its members ''in any capacity'' and fined $50,000. He was not reachable for comment.

''While we don't agree with the decision in this particular instance, it has done nothing to shake our confidance in the arbitration process which we feel is an equitable and efficient manner to resolve disputes of this nature,'' said Steve Faigen, a Shearson spokesman in New York.

Many brokerage houses - like Shearson - require customers, upon opening accounts, to sign agreements that they will take disputes with the house to arbitration rather than court.

Last year the U.S. Supreme Court, in cases involving Shearson, upheld the legality of compelling customers to sign arbitration agreements as the price of doing business.

Several members of Congress have criticized the practice as unfairly restrictive.

''What's important about this award,'' said Deborah Masucci, director of arbitration for the NASD, ''is that it shows arbitrators are willing to make such awards where the conditions are egregious.''