A lawyer for Wells Fargo Advisors has persuaded a Finra arbitration panel to halt what the wirehouse branded a “parade” of its former staffers through arbitration.
Megan Christensen of Lawrenceville, N.J.'s Stevens & Lee, convinced the panel to bar one of the wirehouse’s ex-financial advisors from bringing in former colleagues to testify and help him battle the more than $500,000 claim the firm filed against him.
"I don’t believe that it’s relevant to parade in here former financial advisors to air their grievances about Wells Fargo Advisors. They all leave for their own reason," Christensen told the panel.
The panel members agreed and also issued a more than $500,000 award against the advisor, based on Wells Fargo’s claims that he needed to repay promissory notes allegedly due after he left the wirehouse in 2017.
The WFA’s lawyer’s specific assertion before the Finra panel became public last week when partial transcripts of the hearing were filed in a federal lawsuit initiated by the ex-WFA advisor, Joseph Shimko, against his former employer.
Some details of the arbitration hearing are now available in evidence filed in Shimko's lawsuit and will likely draw interest from other FAs because they show how advantageously such hearings often play out for their employers.
“[T]he panel failed to fully and fairly hear and consider all the evidence in support of Shimko’s defenses and counterclaims and evidence that was contrary to Wells Fargo’s argument that Shimko’s defenses and counterclaims were simply a fabrication,” his lawyer, Christopher Kammerer of West Palm Beach, Fla.’s Kammerer Mariani argues in his most recently-filed brief in federal court.
In his lawsuit, Shimko alleges WFA breached its employment agreement with him by sending client referrals to bank representatives instead of to wealth management FAs despite promises to do the reverse. Shimko also alleges the Finra panel denied him the opportunity to have two of his fellow ex-WFA financial advisors corroborate his claims.
For its part, Wells Fargo denied it breached its employment agreement with one of its ex-FAs by referring clients to its bank reps rather than to its brokerage unit.
In its answer to Shimko’s lawsuit, Wells Fargo labels his allegations as "inaccurate and without merit."
Shimko, a 16-year industry veteran who left WFA in 2017, also alleges in his lawsuit that the Finra panel failed to postpone his hearing to accommodate related conflicts caused by Hurricane Dorian, which ravaged parts of the Florida coastline where he resides a week before his scheduled Finra hearing.
The two other ex-WFA advisors whom Shimko sought to have testify were part of an “exodus” that left the wirehouse because of the bank’s alleged practices of depriving its FAs of client referrals, Shimko’s lawsuit alleges. The two whose testimony was thwarted are now employed at Raymond James Financial Services.
In its answer to the lawsuit, Wells Fargo argues: "Shimko has failed to supply any evidence to support his allegations.” Therefore, he has not identified a standard for vacating or modifying the arbitration award, Wells Fargo argues. Specifically, the wirehouse argues Shimko didn’t show the arbitrators were “guilty of misconduct in refusing to postpone the arbitration or that he was denied a fundamentally fair hearing” or that they abused their discretion.
At the Finra arbitration, Shimko’s lawyer Kammerer argued the two other former WFA advisors’ testimony would be relevant, despite the WFA’s lawyer’s statement to the contrary and that the evidence would not be duplicative.
“Wells Fargo in their opening and throughout has attacked Mr. Shimko’s credibility. They told you this is all made up, his reasons are superficial, he was not affected … These other witnesses are here to tell you what was going on with that,” Kammerer told the arbitration panel.
The WFA lawyer Christensen countered: “It’s my understanding that Mr. Shimko will be testifying, so the panel is free to test his credibility and the reasons that he’s going to present to you for why he left Wells Fargo Advisors. You don’t need to parade in other people to support that. He’s here to tell his own story, which is the purpose of these proceedings.”