A Financial Industry Regulatory Authority arbitrator recently ruled against Wells Fargo Advisors in a dispute with one of its former advisors, who had alleged that comments made by WFA in her Form U5 filing were defamatory.
Wells Fargo declined to comment Tuesday, after John D. Mattingly, the sole public arbitrator asked to resolve the dispute, said the bank was indeed liable and must pay Amy Kaler Webster some $30,000 in attorney’s fees.
Webster was a rep with Wells Fargo from June 2007 until March 25, 2020, when the firm said it “discharged” her, according to FINRA BrokerCheck records. She is currently a rep for Atlanta, Georgia-based Register Financial.
Webster was “discharged by” Wells Fargo Bank after a bank investigation reviewed complaints received from two bank customers alleging the customers were enrolled in renter’s instance policies for which the banker received sales credit without the customers’ authorization, the bank claimed.
The advisor denied the clients’ allegations.
In a statement on her disclosure, Webster said part of her role as senior wealth management private banker at the firm was to “refer customers to an authorized third party contracted by Wells Fargo for customers interested in renters insurance.”
She argued that she was “not the agent of record nor did she receive any compensation other than an internal referral credit after the authorized policy was in place.”
The advisor explained that she “followed Wells Fargo’s policies and procedures and any allegation to the contrary is false,” adding she “did not write, place or receive the premium to place these policies.”
In the arbitration decision posted on FINRA’s website Thursday, Mattingly said he recommended the expungement of the termination explanation by Wells Fargo in Webster’s Form U5; that the wording be changed to reflect it was a “not for cause termination;” and that the reason cited be changed from “discharged” to “other.”
He also recommended expungement “based on the defamatory nature of the information.”
In a statement provided to ThinkAdvisor, Robert Herskovits, the attorney representing Webster, said: “We are pleased by the arbitrator’s decision to expunge termination information which we deemed to be defamatory and punitive in nature.”
“The fact that attorneys’ fees were also awarded sends an appropriate message to firms which fail to properly discharge Form U5 reporting obligations,” Herskovits explained.