The broker allegedly breached terms of a promissory note, and Wells Fargo Advisors no doubt expected this to be an "open and shut" case.  As lawyer Bill Singer points out, "slum dunk" case, like this FINRA arbitration case filed in October 2009, can have unexpected endings.

Wells Fargo Advisors sought $239,215.28 from Stephen W. Lowther, a former employee of Wachovia Securities, who is alleged to have breached a promissory note dated 2/8/08.  Wells as Claimant sought repayment of note principal, 7 % interest from date of filing (August, 2009) and other costs/fees.

As Mr. Singer notes, Respondent Lowther generally denied the allegations, asserted affirmative defenses, and filed a Counterclaim alleging, among other things, fraud and defamation.  He sought unspecified monetary damages; punitive damages; various costs, fees, and expenses; and an expungement of his Form U5.  Respondent was represented by legal counsel until on or about 11/3/10, at which time he appeared pro se.

Panel's Ruling, Bill Singer's Comment.  The FINRA Arbitration Panel denied Claimant Wells Fargo’s claims, and it denied Respondent’s claims, including his request for an expungement.  

Mr. Singer points out that this was not a particularly complicated case:  An employee is given a employee forgivable loan (“EFL”) in the form of a PN.  If the employee leaves prior to the expiration of the term of the PN, any unaccrued balances remain as a loan and are subject to repayment.  Without further details in the FINRA Decision in this matter, pretty much asll we know is that Claimant wanted repayment of at least some $240,000 plus.  Also, and remarkably (according to Bill Singer), Respondent finished the case as his own counsel and managed to persuade the FINRA Arbitrators that he should be relieved of any obligation to repay the amount in dispute.  Given the final findings by the Panel, Respondent clearly emerged as the winner.

    Singer's Takeaway is fairly simple:  sometimes if you just hang in there, your former firm’s slam-dunk, guaranteed, you’re-gonna-regret-this case may prove to be so much hot air.  More often than not, however, you take this type of dispute to a hearing and you’re going to wind up on the short end of the stick. On the other hand, every so often, miracles happen.  

For further details, go to:   [Forbes, 8/15/11, "Wells Fargo Loses Slam Dunk .."]