Thursday, September 19, 2019

Can Claims Regarding False Criminal Report be Forced to FINRA Arbitration?

A New Jersey pastor who was falsely arrested because of errors made by Wells Fargo employees may be forced to resolve legal claims against the bank in arbitration, renewing questions about banks' use of the process.

According to press reports, Jeff Edwards, the pastor of Parsippany United Methodist Church for the past 29 years, sued Wells Fargo in May to recoup costs related to his arrest, which was eventually dismissed after it became clear the bank had mistakenly identified the wrong person related to cashing fraudulent checks.

Wells Fargo is seeking to move the case out of court, arguing that the pastor is bound by an arbitration clause he signed when he opened his account with First Union 22 years ago.

As I have discussed many times, those arbitration agreements are binding, but the exact language of the agreement is going to be significant. While all of the brokerage firms use similar language in their arbitration agreements, there are some differences. It will be interesting to

In addition, according to the article, the arbitration agreement was signed 22 years ago. FINRA has specific requirements as to the terms and conditions of such agreement, and the agreement may not be enforceable if those terms and conditions are not met. Many of those conditions were imposed in recent years, as the rule was amended at least 5 times in the last 30 years.

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