An arbitration panel ordered Wells Fargo Clearing Services to pay a former broker $2 million in damages following a dispute over the circumstances of his termination, according to AdvisorHub.
The Financial Industry Regulatory Authority arbitrators made their decision in the case of Thomas H. Ratliff, who was discharged by Wells Fargo in January 2024 from a branch in Nashville, Tennessee. Ratliff’s BrokerCheck record said that he had been accused of submitting a referral without speaking with a client and that he sent email without required disclosures.
Ratliff, however, contended that the firm dismissed him in retaliation for having flagged instances of fraud as well as problems with how a partner was handling client accounts and a succession arrangement between the two advisors. Ratliff accused Wells Fargo of defamation, libel, and interference with business relationships, among other allegations.
Ratliff alleged that Wells terminated him after months in which he had been “reporting instances of fraud and theft…regarding a partner’s actions.”
The broker said he was subjected to an “independent internal review for baseless violations unrelated to sales practices, without any harm inflicted on customers or any customer complaints.”
Ratliff, a 16-year-broker, also claimed Wells interfered knowingly with his client relationships and that his former business partner, Thomas K. Brandstater, failed to repay a $70,000 loan issued to “help” establish a succession agreement.
The FINRA panel of two public and one non-public arbitrators ruled in favor of Ratliff, finding Wells Fargo liable for compensatory damages tied to claims of defamation, interference with business relationships and retaliatory discharge,
Wells was ordered to repay Ratliff $3 million in damages but offset that amount by $1 million plus interest which he owed on six promissory notes. Brandstater was also ordered to pay Ratliff more than $38,000 in damages. Punitive and treble damages were denied.
The arbitrators also granted Ratliff’s request for expungement. It recommended Wells Fargo change his termination reason to “other” and replace the firm’s explanation with the following language: “The FA and his partner entered into a succession agreement and informal partnership that was to deal with their compensation and division of labor for handling mortgage sourcing and assets. Over time, they had significant, unresolvable disputes concerning their partnership. Therefore, it was in the best interest of the firm to end the arrangement by only retaining the asset business of that partnership. There was neither an adverse impact on nor damages to any customers.”
The panel also recommended expunging the underlying disclosure from Ratliff’s record entirely, citing the defamatory nature of the information.
A Wells spokesperson said the firm is considering whether it will appeal the decision. “While we appreciate the panel’s decision to hold Mr. Ratliff accountable for his loan, we disagree with other findings and are considering our options,” the spokesperson said.
Ratliff had sought up to $44.5 million in damages at the hearing. Wells and Brandstater denied Ratliff’s allegations, and the firm made a counterclaim that Ratliff breached his contract and owed repayment on the promissory notes.
The attorneys at Hyman Cotter PC have considerable experience with FINRA’s procedures for expunging false, defamatory and erroneous disclosures from a registered representative’s record. This experience includes seeking expungement in existing FINRA customer and employment arbitrations, as well as filing separate FINRA arbitrations for the sole purpose of seeking expungement. If you have any concerns about problematic disclosures on your CRD record or those that are viewable on FINRA’s BrokerCheck portal, contact Hyman Cotter PC at 833-665-0784 or through our online contact form for a free consultation.
