A group of investors filed a brief in appellate court in support of a judge who overturned an arbitration award that had gone in favor of Wells Fargo Advisors, Financial Advisor reports.
The Jan. 25 ruling by Fulton County Superior Court Judge Belinda E. Edwards is currently being appealed by Wells Fargo in the Georgia Court of Appeals.
Edwards vacated a decision by FINRA arbitrators who sided with Wells Fargo in a claim brought by client Brian Leggett and Bryson Holdings. 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 her ruling, Edwards stated that Wells Fargo and its counsel had manipulated the arbitrator selection process. She found there had been a secret agreement between FINRA and Wells Fargo to remove certain arbitrators from the case, calling into question the fairness of the entire FINRA arbitration process.
The brief recently filed by the investors asserted that Edwards’ finding of a fraudulent award was factually correct, and that judicial review of arbitration awards is essential to ensuring a fair and neutral arbitration process.
FINRA and Wells Fargo have both denied there were any improprieties in the process of choosing the arbitrators. In its appeal of the judge’s ruling, Wells Fargo claimed “the factual findings in its Order are false and wholly unsupported by the record,” and said the parties followed FINRA rules.
In the wake of Edwards’ decision, FINRA hired a law firm to conduct an independent review of its procedures for selecting arbitrators in the case.
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