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Ex-Wells Fargo Advisors FA Wins Big Arb Award

May 1, 2017

A Finra arbitration panel has ruled against Wells Fargo Advisors in its claim against a broker who solicited clients after leaving the firm, Financial Advisor writes.

The panel awarded $384,000 in damages to Joel Jacobs of Omaha, Neb., who left Wells Fargo Advisors in February 2015, according to the publication. The firm claimed Jacobs violated the so-called broker recruitment protocol when he sent an unauthorized letter to Wells Fargo Advisors customers in a bid to grow the list of clients he could potentially solicit, according to the award cited by Financial Advisor.

Jacobs, a former pro football player who had played for the New England Patriots and St. Louis Rams before becoming an advisor, accused the brokerage of causing him loss in income by unjustly stripping him of clients, according to the award. He also said he was harassed by James Pekelder, a Wells Fargo Advisors manager and his former partner, who also allegedly “took unreasonable inflammatory actions against Jacobs,” according to the award cited by Financial Advisor.

Jacobs, however, is on the hook to Wells Fargo Advisors for $22,700 in attorneys’ fees resulting from the discovery case, the publication writes. The award amount is net of the fees, according to Financial Advisor.

The discovery case, which is not discussed in the award document, involved an alleged outside business Jacobs was in with his father-in-law and a request for information about another business that Jacobs wasn’t a part of, his attorney tells the publication. Jacobs, who in March 2015 dropped his securities license and became an owner in the RIA Quantum Financial Partners, didn’t return Financial Advisor’s call for comment. A Wells Fargo spokeswoman didn’t provide comment on the issue to the publication.

(Getty)

Meanwhile, Wells Fargo has suspended the head of wealth management in its Chicago private banking office, as well as two other execs, according to Crain’s Chicago Business. The firm suspended Chip Flannagan, senior vice president and regional managing director who’s helmed the office for 10 years, and senior vice presidents Scott Landau and J. Scott Voigt, pending an internal investigation, according to the publication.

Wells Fargo told its Chicago employees about the suspension in a phone call, a source who heard the message tells Crain’s.

A spokeswoman for the firm declined comment to the publication, but a source tells Crain’s the issue is specific to the Chicago office and does not appear to be tied to last fall’s retail banking scandal, according to the publication. In September, Wells Fargo paid $185 million in fines following revelations that thousands of its retail branch employees opened up to two million bogus debit and credit accounts without customers’ knowledge.

By Alex Padalka
  • To read the Crain’s Chicago Business article cited in this story, click here.
  • To read the Financial Advisor article cited in this story, click here.