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Georgia Ruling Found Wells Fargo and FINRA in Cahoots, Tainting the Arbitration Panel Selection Process; Wronged Investors Demand Answers from FINRA

WASHINGTON, DC – February 2, 2022 – Last week, the Superior Court of Fulton County, GA found that Wells Fargo Counsel and FINRA Dispute Resolution manipulated the arbitration panel selection process resulting in a favorable arbitration ruling for Wells Fargo Clearing Services. Arbitration attorneys representing the wronged investors in the case had filed a civil complaint against FINRA Dispute Resolution arguing that FINRA and Wells Counsel had improperly stacked the supposed “neutral arbitration panel” via an undisclosed arrangement between FINRA and Wells Fargo.

“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”, the court found, adding: “[p]ermitting 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 concern now is how often this corrupt process occurred. FINRA handles hundreds of arbitration cases against Wells Fargo and other major financial service providers each year, and last week’s ruling casts a large shadow over any FINRA arbitration ruling.

Joseph Peiffer, managing partner of Peiffer Wolf Carr Kane Conway & Wise (“Peiffer Wolf”) and former president of the Public Investors Advocate Bar Association (PIABA), said in response to the vacated arbitration ruling: “FINRA Dispute Director, Rick Berry, needs to come down to Capitol Hill, raise his right hand and explain to the American investing public just how deep the corruption goes at his industry-run forum. Congress and investors need to know: ‘How many other arbitration panels have been tainted?’”

As part of the FINRA arbitration process, wronged investors are entitled to a neutral panel of arbitrators as set forth by the FINRA Neutral List Selection System process, implemented in 1998. In the case in question, Leggett, et al. v. Wells Fargo Clearing Services, et al, Wells Fargo counsel was able to eliminate potential arbitrators from the panel via an undisclosed arrangement with FINRA Dispute Resolution.

“It’s unconscionable that FINRA would stack the deck against American investors who have had their livelihoods turned upside down and their retirement savings stolen from them. The ruling in Georgia highlights FINRA’s improper ‘special relationship’ with the financial services industry, which many have long suspected to be corrupt. It’s my hope that Congress and the SEC get to the bottom of this immediately so we can begin to sort out how many arbitration cases need to be revisited,” Peiffer added.

Peiffer Wolf stands in solidarity with wronged investors and joins the Public Investors Advocate Bar Association in calling for an immediate investigation by the SEC and congressional hearings as to FINRA’s operation of its arbitration forum.


MEDIA CONTACT: Alex Frank, (703) 276-3264 or [email protected].

Peiffer Wolf Carr Kane Conway & Wise is a national law firm with offices in San Francisco, Los Angeles New York, New Orleans, Austin, Chicago, Cleveland, St. Louis and Youngstown.

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