Financial Advisor IQ (April 7, 2022) - The company says the judge’s ruling that it had manipulated the arbitrator selection process is not supported by evidence.
Wells Fargo is fighting back accusations that that a Financial Industry Regulatory Authority arbitration panel favored the firm in a case since vacated by a judge in Georgia, according to news reports.
The company is requesting that the Court of Appeals of Georgia overturn the January ruling by Judge Belinda Edwards of the Superior Court of Fulton County of the State of Georgia that vacated a 2019 arbitration award in Wells Fargo's’ favor, Barron’s writes, citing a brief filed on Tuesday.
Brought by Brian Leggett and Bryson Holdings, the arbitration claim sought $1.1 million in losses as a result the alleged actions of a Wells Fargo advisor.
Edwards had ruled that Wells Fargo and its counsel, Terry Weiss, “manipulated the Finra arbitrator selection process,” which she said “calls into question the entire fairness of the arbitral forum,” as reported.
But Wells Fargo says in its appeal that Edwards’ ruling was “false and wholly unsupported by the record,” according to Barron’s.
Wells Fargo and Leggett, the company claims, “freely bargained to resolve their disputes in an arbitration that would not be second guessed in court. The trial court’s legal errors destroyed that bargain — thus undermining the well-established policy in favor of both arbitration and freedom of contract,” according to the publication.
Barron’s could not reach the lawyer representing Leggett for comment. Weiss referred the publication’s request for comment to Wells Fargo. A spokesperson for the firm reiterated to Barron’s that Wells Fargo “adamantly” denies the allegations cited in Edwards’ ruling.
“As we previously stated, Wells Fargo follows all Finra rules and procedures for the arbitrator selection process, as we did in this case,” the spokesperson told the publication in a statement.
The case has already attracted the attention of Sen. Elizabeth Warren, D-Mass., and Rep. Katie Porter, D-Calif., who have called on Finra for more details about its arbitrator selection process and the Wells case, as reported.
Moreover, the Public Investors Advocate Bar Association has called for an investigation of the matter by the Securities and Exchange Commission, as reported.
Finra has hired an outside law firm to investigate whether the self-regulator’s Dispute Resolution Services complied with rules on arbitrator selection, as reported.