Wells Fargo Broker Fired Over Client Paperwork Must Return $1 Mln Bonus
A former Wells Fargo Advisors broker has been ordered to pay the firm $1.6 million after failing to convince a Financial Industry Regulatory Authority arbitration panel that he was wrongfully terminated and defamed over mismanaging a client’s money-transfer documents.
Eric Zakarin owed $1.14 million of the “forgivable loan” Wells had given him as a signing bonus when he was fired in April 2015, 17 months after joining its Westfield, NJ, branch from Morgan Stanley, the broker-dealer claimed in its initial arbitration filing last year.
Zakarin’s offense? He traveled to Switzerland to help a client repatriate foreign currency to the United States under terms of an Internal Revenue Service offshore voluntary disclosure program, but failed to provide the client’s signed anti-money-laundering form to customs officials on re-entering the U.S., according to Finra’s BrokerCheck database.
The Finra panel awarded Wells Fargo the outstanding million-dollar balance it claimed he owed on his promissory note obligation, $96,000 in interest and $367,000 in attorney’s fees and costs, according to the decision posted on Finra’s enforcement decision website on Oct. 21.
The decision may be an object lesson for brokers who work at firms owned by banks that are under intensifying scrutiny regarding anti-money laundering obligations, said Rogge Dunn, a plaintiff’s lawyer in Dallas who often represents brokers.
“When firms have someone in violation, and they’re expendable, they will fire them…to have a track record of being tough on violations,” he said, noting that AML controls are a Finra examination priority this year.
The Finra arbitrators did not explain their reasoning, but denied Zakarin’s counterclaim for $3.25 million in damages and his request for expungement of Wells’s explanation of his dismissal.
Zakarin, who was managing $261 million of client assets when Wells hired him in 2013, now works at Independent Financial Group in Basking Ridge, NJ. Neither he, his lawyer nor a spokeswoman at Wells responded to requests for comment.
A 29-year veteran of the securities industry, he had worked at Lehman Brothers, Smith Barney and UBS Financial Services before jumping in 2006 to Morgan Stanley.