Judge Vacates Arbitration Award, Condemning Wells Fargo, Attorney and FINRA
From the Desk of Jim Eccleston at Eccleston Law:
A Georgia Superior Court judge has vacated an arbitration award that Wells Fargo had obtained nearly 3 years ago involving a client who sued the firm for mismanaging his account and, in doing so, has rocked the industry with sweeping, serious allegations of misconduct and conspiracy.
Along with dismissing the July 2019 decision in which Wells Fargo had prevailed, Fulton County Superior Court Judge Belinda Edwards criticized the process of arbitration selection by the Financial Industry Regulatory Authority (FINRA) when it came to one lawyer representing Wells Fargo, Terry Weiss.
Any alteration to the selection process would violate industry rules and deviate from the decades-old protocol that requires a computer-generated list to select neutral panelists. Judge Edward scrutinized the FINRA arbitration system and its potential to employ impartial arbitrator panels, who ultimately determine whether the broker-dealer or investor should prevail.
Specifically, Brian Leggett filed a FINRA arbitration claim against Wells Fargo alleging that the firm failed to sufficiently monitor and supervise two advisors who mismanaged his account. Leggett lost his claim in 2019 as three FINRA arbitrators denied the allegations against Wells Fargo. An appeal followed. After reversing Wells Fargo’s victory, Judge Edwards scrutinized FINRA, Wells Fargo and its attorney Terry Weiss for permitting manipulation of the choice of arbitrators that ultimately would favor the brokerage firm over the client. According to the court order, FINRA permitted Weiss to alter FINRA’s “neutral list” of arbitrators in the Leggett case, which unfairly tipped the scale of justice.
The industry is in an uproar. Significant ethical, regulatory, civil and perhaps even criminal issues face Weiss, Wells Fargo and those individuals at FINRA who negligently or knowingly participated in this scheme.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.
Tags: eccleston, eccleston law, arbitration, wells fargo, finra
