Wells Fargo Advisors Ordered to Pay $2.8 Million to Limited Partnership
By Dow Jones Business News, July 09, 2013, 04:07:00 PM EDT
By Corrie Driebusch
NEW YORK--An arbitration panel has ordered Wells Fargo Advisors to pay $2.8 million to a family limited partnership that accused the firm of negligence in connection with alleged thefts from its investment account.
The Miami , Fla.-based partnership had sued a former secretary, accusing her of forging signatures to transfer money out of its accounts, and won a $21 million judgment in a Florida district court in 2010. That suit alleged the secretary, Esther Spero, took the money for her personal use from accounts at Wachovia Securities and elsewhere between 2005 and 2008. Wachovia was later acquired by Wells Fargo & Co. (WFC ).
In its separate arbitration claim against Wells Fargo, the partnership, called College Health and Investment Ltd., said the brokerage was negligent in failing to detect the alleged theft.
The Financial Industry Regulatory Authority arbitration panel found Wells Fargo to be liable and ordered that it pay $ 2.3 million in damages and prejudgment interest. Wells Fargo also must also pay $419,000 in margin interest and $35,000 in costs.
College Health and Investment Ltd. had requested $4.4 million, according to the arbitration panel ruling.
As is customary in the FINRA claims system, the written award did not explain the panel's reasoning. Robert Wayne Pearce, lawyer for the partnership, said it showed the panel agreed with the negligence claim.
A Wells Fargo spokesman said in a statement, "We're disappointed in the panel's decision and don't believe it was warranted by the facts presented during the hearing."
Write to Corrie Driebusch at firstname.lastname@example.org.
Dow Jones Newswires 07-09-131607ET Copyright (c) 2013 Dow Jones & Company, Inc.