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Finra Arbitrator Orders Expungement of Ex-Wells FA’s Record

By Alex Padalka November 23, 2020

A Finra arbitrator has ruled in favor of a former Wells Fargo broker seeking expungement after the firm discharged her over allegedly improper sales of insurance products.

The company discharged Amy Webster in February this year, after she had been with the firm for 12 years, according to BrokerCheck. Wells Fargo alleged that it made the move after reviewing complaints that American Modern Insurance Group received from customers, who said they were enrolled in renter’s insurance — for which Webster allegedly received sales credit — without the customers’ authorization.

In 2018 Wells Fargo reached a $575 million settlement with state attorneys general to resolve allegations that it improperly referred customers for enrollment in third-party renters and life insurance policies, among other alleged violations.

In the broker comment section on her discharge on BrokerCheck, Webster wrote that it was part of her role as a senior wealth management private banker “to refer customers to an authorized 3rd party contracted by Wells Fargo for customers interested in renters insurance.”

“[Webster] 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,” her broker comment reads. “She followed Wells Fargo’s policies and procedures and any allegation to the contrary is false. She did not write, place or receive the premium to place these policies.”

Webster also filed a Finra arbitration claim in March against Wells Fargo, alleging that the Form U5 termination notice that the firm filed for her was defamatory, Finra says in an award document published last week. Webster initially sought expungement of the Form U5 and a nominal $1 in compensatory damages, but at the hearing then requested that Wells Fargo also cover her lawyers’ fees and costs, Finra says.

Last week, a Finra arbitrator recommended the expungement of the termination explanation on Webster’s Form U5, changing the reason for termination from “Discharged” to “Other,” the industry’s self-regulator says. The arbitrator also ordered Wells Fargo to pay $30,000 in lawyers’ fees for Webster, Finra says. Earlier this month, another Finra arbitration panel ruled in favor of a former Edward Jones registered representative seeking the expungement of information on her termination in 2017.

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Tags:  Regulatory/legal issues , Edward Jones , Wells Fargo

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