Judge: Wells Fargo’s Lawyer Had Secret Deal with FINRA To Rig Arbitrations  

In a shocking decision, the Superior Court of Fulton, Couty Georgia recently found that Wells Fargo Advisors engaged in a scheme to “manipulate” and “secretly redline the neutral list” of FINRA arbitrators.  The decision was published on January 25, 2022 and can best be summarized by Judge Belinda Edwards’ factual conclusion: “The Court’s factual review of the record evidence leads to its finding that Wells Fargo and its counsel manipulated the FINRA arbitrator selection process in violation of the FINRA Code of Arbitration Procedure, denying the Investors’ their contractual right to a neutral, computer-generated list of potential arbitrators. Wells Fargo and its counsel, Terry Weiss, admit that FINRA provides any client Terry Weiss represents with a subset of arbitrators in which certain arbitrators (at least three, but perhaps more) are removed from the list Wells Fargo agreed, by contract, to provide to the Investors in the event of a dispute. 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.”

The court’s conclusions are disturbing and truly call into question the entire fairness of the forum.  Judge Edwards also found that, “The only reason this secret agreement came to light was because FINRA accidentally included one of the three Postell arbitrators, Fred Pinckney, on the neutral computer-generated List.”  The factual findings made by Judge Edwards are disturbing and should be investigated.

Decision Finding that Wells Fargo Secretly Colluded with FINRA

Where is Congress and the SEC?

The Judge’s ruling questions the legitimacy of the FINRA arbitration process.  It also begs the obvious question – how many other “secret” deals are there with industry lawyers? Hopefully, the judge’s ruling will spark the attention of the Securities and Exchange Committee or members of the financial services committee.  In either case, something must be done to remedy this very broken system.  

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