Arbitrators have made their decision in a dispute between Wells Fargo and one of the firm’s former advisors in Portland, Maine, according to Advisor Hub.
A panel of three arbitrators said that Mark S. Foley will have to repay Wells Fargo $403,610 but held the wirehouse liable for $403,611, resulting in Wells Fargo owing a net $1 in damages to Foley, who had been seeking $1 million in lost wages and lost earnings capacity.
Foley was hired by Wells from RBC Wealth Management in 2015 but chronicled the problems he faced in transitioning his book of business from his former company. He said that Wells Fargo’s retail banking scandals that were disclosed following his move made it difficult to attract new clients, and added that Wells did not provide the administrative assistance it had promised while he was being recruited.
Foley represented himself at the hearings before two public arbitrators and one non-public arbitrator, and testified about the obstacles he encountered after arriving at Wells Fargo.
“The required paperwork for implementation of the transfer of customer and client accounts from RBC to Wells Fargo languished and were mismanaged and mishandled with countless errors while being serviced ‘offshore’ in the Philippines,” the arbitrators wrote.
The panel found that Wells “negligently damaged” the value of Foley’s book of business and “negligently impaired” his earning capacity by not giving him clerical and administrative assistance during his transition from RBC. The arbitrators also said the Wells Fargo scandals diminished Foley’s capacity to generate revenue. But they found no “intentional deception” by the wirehouse.
The arbitrators noted that between 2016 and 2020 there was an exodus of about 14 senior brokers from the Wells Fargo Portland office and that Foley also wanted to leave “but was unable to find other employment due to his diminished ‘book of business’ and because of his outstanding financial obligation to Wells.” He eventually did depart Wells in February 2022.
A Wells spokesperson said in a statement: “We are disappointed with the decision, and we are considering our options.”
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