John L. Perry and Robin Johnson are two former financial advisors for Wells Fargo that have brought a complaint against the company. After news broke of Wells Fargo’s extensive misconduct, their partnership with Wells Fargo lost half its business, and suffered significant damage. (A timeline of Wells Fargo’s actions since 2016 is available here, including over 3.5 million fake accounts and extensive over-charging of clients.)
Perry and Johnson may only be the first of multiple financial advisors (FA) that file these kinds of complaints against Wells Fargo in the future. “It will have a multiple-ripple effect,” Scott Silver discussed with a reporter. “Other angry, frustrated brokers absolutely will be emboldened to bring the same type of claims.” Other attorneys have heard from FAs with similar complaints against Wells Fargo.
Central to the FAs issue is a promissory note that they are required to sign when they join Wells Fargo. The company’s misdoings have caused a number of FAs to lose a significant amount of business, but they can’t always quit and go elsewhere. If they leave before the note is paid, the company uses FINRA arbitration to collect the note, and rarely loses to the FA.
The series of scandals at Wells Fargo caused over 1,000 FAs to leave the company for other broker-dealers, to open their own firms, or become independent FAs. Advisors that remain at the company because of their promissory note obligation are stuck for a while, working at a company they would like to walk away from. A few FAs have thrived even with the scandal-hit company, but more advisors have seen their business plummet.
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.