FINRA Criticized Over Alleged Rigging Of Arbitration Matters Involving Wells Fargo

Posted on February 21st, 2022 at 12:09 PM
FINRA Criticized Over Alleged Rigging Of Arbitration Matters Involving Wells Fargo

From the Desk of Jim Eccleston at Eccleston Law:

Senate and House lawmakers have criticized the Financial Industry Regulatory Authority (FINRA) Dispute Resolution over the fairness of its arbitration system after a judge recently determined that a FINRA arbitration panel was biased against an investor claimant in 2019.

Senator Elizabeth Warren sent a letter last week to FINRA Chief Executive Robert Cook citing the order by Georgia Superior Court Judge Belinda Edwards to vacate an arbitration claim in which Wells Fargo had prevailed in 2019. The claim, which was filed by former Wells client Brian Leggett, accused the firm of mismanaging his account. The rigging of the arbitrator selection system allegedly occurred at FINRA several times, if not each time, a certain attorney represented Wells Fargo in an arbitration matter.

Judge Edwards determined that FINRA enabled Wells Fargo to alter the list of available arbitrators to hear the case, which compromised the neutrality of the arbitration space. Warren’s letter posed numerous questions for Cook to answer, including how arbitrators were selected for the Wells case as well as whether the firms discussed their selection with FINRA officials. Warren had previously written to Cook in 2021 after GameStop’s trading frenzy, which prompted Cook to assure her of the neutrality of FINRA’s arbitration system.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.



Tags: eccleston, eccleston law, wells fargo, finra

Return to Archive



I just received this letter from the CFP Board. Thank you, Thank you, THANK YOU!

David Y


June 14, 2024
Wells Fargo Fires Employees for Faking Work

Wells Fargo & Co. recently terminated over a dozen employees following an investigation into allegations of fake work activities.

June 13, 2024
FINRA Struggles to Revise Outside Business Rules

The Financial Industry Regulatory Authority’s (FINRA) attempt to update its rules on advisors’ outside business activities has stalled, according to Robert Colby, FINRA's chief legal officer.

June 12, 2024
Tax Court Denies Madoff Victims $8.2 Million Deduction

Victims of Bernie Madoff's Ponzi scheme, Christopher and Silvana Pascucci, cannot claim an $8.2 million tax deduction for their investment in life insurance premiums.