Fired Wells Private Banker Prevails in Unusual Defamation Case

In a decision likely to gladden the hearts of aggrieved employees, an arbitration panel has ordered Wells Fargo Advisors to amend a termination notice filed with regulators to show that a former banker acted at the behest of her supervisor and a customer in working around some internal account-opening rules.

Kum Hee Kang, who was a Finra-registered private banker handling business accounts at a Wells branch in metropolitan Atlanta, successfully argued without the help of a lawyer that the bank’s terse language in describing the cause of her dismissal damaged her reputation in the securities and banking industries, a three-person arbitration panel ruled last week.

“While we find the C[entral] R[egistration] D[epository] entry to be true as far as it goes, it is not the whole truth and as a result conveys a false implication that Claimant acted underhandedly or with ill intent in opening these accounts as she did,” the arbitration panel wrote.

Kang’s dismissal was triggered by her having emailed account opening disclosure documents to herself and accepting the terms on behalf of the customer whose “fiduciary” business required opening and maintaining dozens of accounts at the branch but who was unable to be physically present one day in April 2016 to sign documents for more than 20 new accounts.

Kang’s superior authorized the work-around but when Wells discovered that Kang and two other individuals violate policies in which they had been trained it terminated them. On the permanent CRD notice, which arbitrators wrote are publicly available, Wells wrote that Kang “sent a bank customer’s electronic new account kit disclosures to her own Wells Fargo email address, and accepted the disclosures online for the bank customer.”

Wells told arbitrators that the language was true, but they wrote that the broker-dealer was raising a liability defense when Kang was simply seeking a recharacterization of her dismissal.

“We are solely concerned with the overall accuracy of the CRD entry, and the only remedy sought is an addition of language more fully describing the circumstances so as to remove the present implication suggesting dishonesty,” the panel of two public and one industry arbitrators ruled in the decision, which was dated August 24.

They ordered Wells to add as clarifying language that Kang acted to “accommodate the customer’s wishes and with the knowledge of, and as authorized by, her superior.”

The arbitrators characterized Kang’s complaint as an expungement case “with an unusual twist” in that she did not seek to remove a CRD entry but only to “‘remove’ its allegedly misleading effect.”

Kang could not be reached for comment, and a Wells Fargo spokeswoman did not immediately return calls for comment.

The arbitrators waived filing fees in the case and charged Kang just an $83.33 subpoena fee on a contested motion and a $1,275 hearing session fee.

Wells paid member and processing fees of about $5,700 and a $2,550 hearing session fee.