Wells Fargo Financial Arbitration Proves Valuable Lesson
In the recently concluded financial arbitration case between Wells Fargo Advisors and Kent Robert Elliott, both sides were held accountable, but the net loss favored Wells Fargo. The details of the claim and counterclaim, as well as the awards were fairly complex, but the resulting message was clear: It is never a good idea to assume that the massive corporation will not risk exposing the skeletons in their closets in bringing you to arbitration for defaulting on a loan. Further, it's also a bad call to stack your chips on them backing off if you make a massive counterclaim, though it certainly can shrink what you could be accountable for.
Cliff-Notes on This Legal Arbitration
Wells Fargo brought Mr. Elliott to arbitration because he allegedly broke the conditions of an employment-related promissory note to the tune of $1,110,592. On top of this, they requested $631,473.56 in damages, plus annual interest of 7% starting on January 5 2009 ($139,149), plus $150,729 in attorneys' fees, FINRA fees of $4700.
Elliott, in return, sought over $2 million in damages and provided a 15 point counterclaim for fraud or intentional misrepresentation, wrongful/retaliatory termination, fraudulent inducement, negligent misrepresentation, breach of employment/compensation contract, breach of fair dealing and good faith, unjust enrichment, promissory estoppel, interference with prospective economic advantage, emotional distress, indemnification, defamation, conversion and recovery of unpaid wages.
The Contract Arbitration Decision and Import
Both sides were held accountable to an extent for their role in this dispute. Neither side got their full award. The primary difference was that the award for Wells Fargo was significantly greater than the award for Elliott to the amount of $778,159.
As mentioned above, this case is an example of how leaving a former employer in the lurch is an intrinsically bad judgement. On the same token, without a great financial arbitration defense, Elliott could have easily been accountable for an additional $141,318. If he had consulted his attorneys before leaving Wells Fargo, he might have seen that it was not worth the risk.