Wells Fargo Wachovia Lose $7 Million Employee Whistleblower Case

July 11, 2011

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in June 2010, Claimant Kipple asserted the following causes of action:
  • violation of New Jersey's Conscientious Employee Protection Act ("CEPA" a/k/a New Jersey's Whistleblower Law);
  • violation of New Jersey public policy;
  • defamation;
  • interference with Advantageous Business Relations/Employment Offers;
  • breach of contract; and
  • indemnification/ advancement of fees.

SIDE BAR: CEPA encourages employees to report illegal or fraudulent workplace activities, policies or practices. Under CEPA, employers are prohibited from taking retaliatory action against an employee after that employee has taken actions, such as, disclosure, testifying, or refusing to further the subject activities.

Claimant Kipple requested not less than $26,082,000 in damages, interest, costs, and fees (modified at the hearing to $23,267,324.28).

In the Matter of the FINRA Arbitration Between Greg Kipple, Claimant, vs. Wells Fargo Advisors, LLC and Wachovia Securities, LLC, Respondents (FINRA Arbitration 10-02871, July 6, 2011).

Respondents Wells Fargo and Wachovia generally denied the allegations and asserted various affirmative defenses.


The FINRA Arbitration Panel found Respondents Wells Fargo and Wachovia jointly and severally liable and ordered them to pay to Claimant:

  • $4,300,000.00 in compensatory damages;
  • $1,000,000.00 on Claimant's defamation claim;
  • $1,000,000.00 in punitive damages pursuant to CEPA;
  • $500,000.00 in attorneys's fees pursuant CEPA; and
  • $30,000.00 in costs


Based upon the defamatory nature of information, the FINRA Arbitration Panel recommended the expungement of the Termination Comment in Section 3 of Claimant Kipple's Form U5 dated August 21, 2009, and amended Form U5 dated March 5, 2010 filed by Wells Fargo Advisors, LLC. Moreover, the Panel recommended that the Reason for Termination be changed from "Discharged" to "Other" and the termination comment be replaced with "Terminated without cause." Accordingly, the Panel recommended conforming revisions amending "yes" answers to "no" on various items and disclosures.

SIDE BAR: Based upon FINRA records, it appears that Wells Fargo terminated Kipple for "FAILURE TO FOLLOW FIRM POLICIES RELATING TO ‘KNOW YOUR CUSTOMERS'."

In his version of events, Kipple asserted that he was terminated for "truthfully responding to regulatory inquiry from FINRA." That inquiry purportedly investigated a customer complaint involving an account with which Kibble claimed that he had no interaction with - notably, the client acknowledged that she had no dealings with Kipple, never spoke to him, and never received advice from him. Wells Fargo apparently settled that complaint in June 2009.

When FINRA asked Kipple for a written response on July 16, 2009, he claims that he sent a draft letter to Wells Fargo's legal counsel but received no response, and thus timely forwarded his letter to FINRA on July 29, 2009. Thereafter, Wells's legal counsel allegedly contacted Kipple on July 30th and said that he had reviewed the letter and intended to get an extension of time to respond. As related by Kipple, when the lawyer learned that Kipple had transmitted the letter to FINRA, the attorney became "unhappy," and Kipple implies that this became the basis for his August 13, 2009 termination.