You Know It’s Bad When A Judge Says ‘Wells Fargo Committed Fraud’ And That’s Not The Key Issue

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You Know It’s Bad When A Judge Says ‘Wells Fargo Committed Fraud’ And That’s Not The Key IssueYou also probably won’t be surprised to see our old friends at FINRA popping up.

• Author:Jon Shazar
• Publish date:Feb 3, 2022

You also probably won’t be surprised to see our old friends at FINRA popping up.

If there is anything that Wells Fargo does well, it’s manipulating matters to its advantage at the expense of its customers. And if there are any things that the Financial Industry Regulatory Authority does well, it is turning a benign if not outright blind eye to such machinations, and barring that selectively editing to the benefit of the folks paying its bills.

In the matter of one customer’s claim related to another of Wells strengths—specifically, fucking up at the expense of its customers—a Georgia judge can’t help but notice all of these proclivities coming to the fore.

Brian Leggett and Bryson Holdings LLC brought the case against Wells Fargo after losing some $1.2 million on a merger arbitrage investment strategy executed by a broker there in 2015 and 2016. The arbitrators ultimately decided in Wells Fargo’s favor…. Finra for years has used a computer system to randomly generate a neutral list of potential arbitrators from which the parties agree on three to decide the case. But in this case, multiple names were removed from the list at the request of Wells Fargo’s lawyer and with the permission of Finra, according to the judge’s decision.

“Permitting one lawyer to secretly red line the neutral list makes the list anything but neutral, and calls into question the entire fairness of the arbitral forum,” Judge Edwards wrote.

To which Wells and FINRA might rightly note that fairness is not the point of arbitration, but that probably wouldn’t go over terribly well with Judge Edwards. In which case the only available course of action is to deny everything and hope that no one takes too close a look at things. And if only that were all, because apparently even an unlevel playing field wasn’t enough to make Wells confident it’d win.

At one point, the arbitration stopped due to a medical emergency. When it resumed, the broker who had been testifying provided different answers than before the break, and the bank’s attorney misrepresented the prior testimony, according to the judge’s decision. “Wells Fargo and its counsel committed fraud,” she said.

Wells Fargo Gamed System in Investor Arbitration, Judge Says [WSJ]

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