Arbitration actions to recover training costs and expenses always beg the question: how valuable was the training if the rep effectively failed the training program? Yet that basic inquiry does not stop the brokerage firms from attempting to collect training costs.
Recently, Wells Fargo sued an adviser for $75,000, plus $19,000 in interest and $21,000 attorneys’ fees, for a total of about $115,000. The adviser denied owing anything.
The FINRA arbitrator did award damages in favor of Wells Fargo, but not for what the firm demanded. The arbitrator awarded only $22,000 total ($12,000 in damages and $10,000 in attorneys’ fees).
That’s an 80% discount. Some would argue still too much to award a firm for its failed training program costs!
