FINRA Panel Awards Wells Fargo $3 Million Judgment

In a significant development within the financial advisory landscape, a Finra arbitration panel has mandated that DayMark Wealth Partners, along with several of its associates, pay a collective sum of $3 million to Wells Fargo.

This decision comes in the wake of accusations from Wells Fargo alleging that DayMark Wealth Partners engaged in unfair competitive practices and violated contractual agreements. These charges were primarily centered around the assertion that a coordinated effort by certain employees to transition to DayMark constituted a direct competitive threat to Wells Fargo.

Wells Fargo's legal action, initiated in July 2022, was a response to the establishment of DayMark by ex-Wells Fargo personnel, notably including Mike Quin, a previous Wells Fargo Advisors manager, and Steven Satter, a former legal advisor within the company.

This new venture was supported by Dynasty Financial Partners, a notable entity that facilitates the transition of advisors from traditional brokerages to independent wealth management practices. DayMark, headquartered in Cincinnati and boasting a management portfolio of $2.5 billion in assets, as per their latest ADV form submission, has since expanded its team by recruiting additional advisors and staff members.

The litigation named several DayMark associates, including Quin, Jason Beischel, Peter Boland, Daryl Demo, Michael Larison, Eric Larison, and Robert Prangley. Wells Fargo's arbitration claim sought repayment of promissory notes purportedly owed by Demo and Quin, alongside compensatory damages estimated between $17.8 million to $40.8 million, in addition to covering the costs incurred by Wells Fargo.

The defense from DayMark and the named individuals refuted Wells Fargo's claims, urging the arbitrators to dismiss the financial giant's demands and instead, award them over $1 million in legal fees and expenses. Following an extensive review across 20 hearing sessions, the panel ruled in favor of Wells Fargo to a significant extent, ordering monetary compensations totaling $1.86 million from Quin and DayMark, with individual penalties assessed against Demo and Quin, alongside minimal fees to cover arbitration costs.

Wells Fargo has publicly expressed satisfaction with the arbitration outcome, emphasizing the resolution of this case as a positive conclusion to the proceedings. Meanwhile, a separate legal engagement continues with Satter, focusing on allegations of contractual breach and interference, with no public comments offered by either party as the case remains active.

This arbitration outcome underscores the complex and competitive dynamics within the wealth management industry, highlighting the legal and ethical considerations surrounding transitions and competitive practices in the sector.


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