FINRA Arbitrators Wrestle With Considerable Confusion In Wells Fargo Employment Case

April 17, 2012

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in March 2011, claimant Schlesinger alleged breach of contract and sought $1 million in compensatory damages, punitive damages, costs, and attorneys' fees. Also, Claimant sought a declaration that Respondent/Counter-Claimant Wells Fargo Advisors, LLC may not enforce the promissory note against Claimant.

In the Matter of the FINRA Arbitration Between:

Jason Martin Schlesinger, Claimant


Peter Yan Hong; Wallace Lawrence Key; Wells Fargo Advisors, LLC, Respondents

Wells Fargo Advisors, LLC, Counter-Claimant


Jason Martin Schlesinger, Counter-Respondent

(FINRA Arbitration  11-01116, April 13, 2012).

Claimant alleged that he was fraudulently induced to join Wachovia Securities by being promised

  • a position in which he would be the sole broker in a start-up hub office specializing in high net worth investors; and
  • that he would have access to a pool of names of so called orphan accounts left from a previous merger of Wachovia Securities and Gold West World Savings.

Claimant contends that it was his understanding that, at first, he would at least be the only broker in the office, which would entitle him to receive all the leads of the bankers in the new office.

Respondents generally denied the allegations, and asserted various affirmative defenses.


In its Counterclaim, Respondent/Counter-Claimant Wells Fargo Advisors, LLC asserted that Claimant breached a promissory note executed by Claimant on April 14, 2008.  That April 14th Note was executed for $925,306 when Claimant joined Wachovia Securities.  On July 16, 2010, the note "was revised down to $792,776.00.  At the hearing, Respondent/Counter-Claimant requested $734,052.27 for the principal balance due on the promissory note plus 3.25% annual interest, costs,and attorneys' fees.


The FINRA Arbitration Panel found Claimant liable and ordered him to pay to Respondent/Counter-Claimant Wells Fargo Advisors, LLC $734,052.27.

The Panel found Respondent/Counter-Claimant Wells Fargo Advisors, LLC liable and ordered it to pay to Claimant $100,000.00.

The net final award owed by Claimant is $634,052.27.

The Panel offered the following observation:

Although the Panel does not feel there was fraud on the part of the recruiters Respondents Peter Yan Hong and Wallace Lawrence Key, there was considerable confusion on the part of all concerned on why Claimant was paid only $87,000.00 for his first year at Wachovia Securities and how it was calculated.

Bill Singer's Comment:

A nice, tight, succinct FINRA Arbitration Decision.