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Client wins $262K arbitration award from Wells Fargo

Bank Investment Consultant

A FINRA arbitration panel has ordered Wells Fargo Advisors to pay a former client more than $262,000 for failing to promptly liquidate his brokerage account, according to a recent FINRA filing and details provided by the client’s lawyer.

Jeffrey Ball, a Los Angeles psychologist, gave the firm written instructions to close the account because he had decided to transfer the assets to a new adviser at another broker-dealer, Ball’s attorney explained.

The account consisted of highly liquid mutual funds totaling more than $3 million.

Rather than liquidate the account, the firm sent Ball’s liquidation instructions to India, a process which took six days, and then were rejected because the Indian representative “didn’t like the way the instructions were written.” The instructions “bounced around” for more than a month before his client’s request was finally honored.

In the meantime, the value of the client’s account dropped by almost $75,000, an amount Ball and Wells Fargo stipulated in arbitration documents.

In FINRA’s filing, the panel criticized the firm’s procedures to process a liquidation request, saying they were “seriously flawed and should be improved.”

Emily Acquisto, a spokeswoman for Wells Fargo Advisors, declined to comment.

The panel held the firm liable for almost $75,000 in compensatory damages and more than $187,000 in punitive damages.