In 2009, securities arbitration against Wells Fargo on behalf of one of its customers resulted in an investigation that eventually led to the dismissal of one of its employees. Gregory Kipple, a former Wells Fargo Advisors broker, was dismissed in August of 2009. Following his dismissal, Kipple filed arbitration with the Financial Industry Regulatory Authority (FINRA) for wrongful termination.
Kipple had been cooperating with a FINRA investigation into a customer complaint against Wells Fargo. Kipple alleged that he had complained, on numerous occasions, about the broker who had worked with the customer. In an attempt to cooperate with FINRA’s investigation, Kipple sent a letter directly to FINRA and was subsequently discharged. According to Wells Fargo, Kipple was dismissed for “failure to follow firm policies relating to ‘know your customers.’” However, Kipple asserts that he did not work directly with the complaining customer. FINRA took no action against him in its investigation.
Though Kipple’s official reason for dismissal was for failure to follow policy, his attorney asserted that it was actually a result of Kipple’s cooperation with the investigation against Wells Fargo. If these allegations are true, his termination would violate New Jersey state law.
On July 6, arbitration ended and FINRA sided with Kipple. He was awarded $4.3 million in compensatory damages and his defamation claim earned him $1 million in damages. He was awarded another $1 million in punitive damages and $530,000 in attorneys’ fees and costs. In addition to the monetary awards, FINRA agreed to change his official cause for termination on public registration documents to “terminated without cause,” and reason for termination will be changed from “discharged” to “other.” Though his financial award for compensatory damages was significantly less than the $23.3 million he requested in arbitration, his lawyer stated that FINRA’s ruling brought Kipple satisfaction.
Wells Fargo, on the other hand, was not so satisfied.
“We are disappointed in the arbitration panel’s decision and are considering our alternatives," the company's spokesperson, Rachelle Rowe, said.
In a financial world where stock broker fraud and broker misconduct are all too common, it is a shame to see an honest broker punished for defending the customer. Thankfully, in this case, justice was done.