Wells Fargo And E*Trade Battle Over Ex-Husband's Withdrawals
In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in December 2011, Claimant Lori Strayn alleged that that without her knowledge or consent, Respondents Wells Fargo and Snyder permitted her ex-husband, Robert Kevin Strayn, to transfer funds from certain Wells Fargo accounts into several E*Trade accounts. Claimants asserted various causes of action including negligence, conversion, breach of contract, breach of fiduciary duty, and constructive fraud. Claimants sought $138,700 in compensatory damages, punitive damages, interest, attorneys’ fees, and costs. SIDE BAR: You got all of that? We got the wife. We got the ex-husband. We got two -- count 'em -- two brokerage firms. And that ain't all of it! Before you stand for the National Anthem, here's the scorecard. And just a head's up: We got a number of scratched starters, some rookies, and a whole batch of guys playing out of position. In the Matter of the FINRA Arbitration Between: Claimants: Lori A. Strayn, Individually and On Behalf of the Payton Ashleigh Strayn U/NV/UTMA Account vs. Respondents: Wells Fargo Advisors, LLC; E*Trade Securities LLC; and Agent Fred Snyder and Cross-Claimant/Cross-Respondent: E*Trade Securities LLC vs. Cross-Respondent/ Cross-Claimant: Wells Fargo Advisors, LLC and Third-Party Claimants: E*Trade Securities LLC and Wells Fargo Advisors, LLC vs. Third-Party Respondent: Robert Kevin Strayn (FINRA Arbitration 11-04556, March 12, 2013). Klaatu Barada Nikto?: What's that "U/NV/UTMA" thing, you ask? That's Wall Street shorthand on the old scorecard. In this case, it stands for "Under Nevada's Uniform Act for Transfer to Minors Act." Wow, you learn a lot of stuff on "Street Sweeper" and it's all for free! Sorry -- it had nothing to do with Klaatu or Gort or Earth's destruction. Hey, go look it up. Respondents E*Trade, Wells Fargo, and Snyder generally denied the allegations and asserted various affirmative defenses. Getting Cross In its Cross Claim, E*Trade Securities LLC, asserted that Wells Fargo was negligent when it failed to contact the Claimants to verify the bona fides of the ex-husband's request to transfer assets to E*Trade. Accordingly, since Wells Fargo was in the best position to have nipped this mess in the bud, that firm should be held accountable for any amounts E*Trade might be compelled to pay in excess of its apportioned degree of fault.