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Springer vs. Wachovia Securities Arbitration—Offense is Defense

Friday, March, 16, 2012

FINRA Arbitration 10-03530, March 9, 2012, also known as “In the Matter of the FINRA Arbitration Between Denise D. Springer, Claimant, vs. Wells Fargo Advisors, LLC f/k/a Wachovia Securities, LLC, Respondent,” is an interesting securities arbitration case where, in no uncertain terms, the Claimant was clearly in the wrong, but minimized their liability by pursuing arbitration. Essentially, after Springer and Wachovia Securities (now Wells Fargo Advisors) split ways, she filed arbitration over her Employee Forgivable Loans (EFLs).


Claims in the Legal Arbitration


In filing the arbitration with FINRA, Springer claimed that the EFLs she had with Wachovia were misrepresented, fraudulently induced, and certain facts were omitted. She wanted the EFLs to be declared by FINRA to be unenforceable, illegal, and invalid. Further, she wanted $1,256,535 in damages.


Wells Fargo denied the claims and made several affirmative defenses. They also made a counterclaim of breach of contract. They also sought $244,797 in damages for the loan's unpaid principal, costs and interest.


The Contract Arbitration's Ruling and Its Import


The FINRA panel found both parties liable in this case. They awarded $166,000 to the Claimant and $272,726 to the Respondent. Additionally, the Claimant had the option to pay in a lump sum or in 60 monthly payments of $1,966. Ultimately, what the Claimant owed the Respondent was $106,726.


Ultimately, the panel decided that the Claimant was more at fault than the Respondent. You cannot just go deadbeat on your debts. However, this case, much like another Wells Fargo securities arbitration (Wells Fargo vs. Elliott), proved that fighting back can shave hundreds of thousands of dollars off such debts. The primary difference between the two cases is that in the Elliott case, Wells Fargo brought him to arbitration, whereas in this case, Springer got the jump on Wells Fargo.