Wells Fargo appeals judge’s decision overturning FINRA arbitration ruling

On Behalf of | Apr 20, 2022 | Financial News

Wells Fargo Advisors is appealing a judge’s ruling which overturned an arbitration award that had gone in the company’s favor, ThinkAdvisor reports.

On Jan. 25, Fulton County Superior Court Judge Belinda E. Edwards vacated a decision by Financial Industry Regulatory Authority arbitrators who sided with Wells Fargo in the case of client Brian Leggett. Leggett said he had incurred over $1.1 million in losses because one of the firm’s brokers had not properly managed his account, but his claim was denied by a panel of three FINRA arbitrators in 2019.

In vacating the arbitration ruling, Edwards found that Wells Fargo and its counsel Terry Weiss had manipulated the arbitration process through an agreement with FINRA to bar certain arbitrators from hearing his cases. Under FINRA rules, the two sides in a dispute can strike names from a randomly selected neutral list of industry and public arbitrators until a final three are chosen.  But Edwards found there had been misconduct in Wells Fargo’s efforts to remove certain arbitrators from the case.

Wells Fargo has now filed a complaint with the Georgia Court of Appeals in a bid to reverse the judge’s decision. The firm argued that the court vacated the award even though “the factual findings in its Order are false and wholly unsupported by the record.”

Wells Fargo noted that FINRA and Weiss have denied there was any agreement between them to bar specific arbitrators from hearing Weiss’s cases, saying “the parties followed the FINRA rules every step of the way.” The firm also asserted that Edwards’ decision violated the Federal Arbitration Act, which states that judicial review of arbitration awards is “narrowly limited.”

Handling financial services disputes requires counsel with a significant understanding of the industry, the laws, rules and regulations that impact our clients and the forums in which disputes are adjudicated. At Lewitas Hyman, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services and EVEREN Securities, serving as outside counsel for some of the world’s largest law firms, and through prior affiliations with the SEC. For more information about our arbitration and litigation services, please contact us (312) 291-4600 or through our online contact form. 

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