A former Wells Fargo advisor is suing to overturn the decision of a FINRA arbitration panel that found him liable for more than $1 million in damages for breach of contract stemming from a years-old dispute over product recommendations.
Christopher Caputo, who was registered with Wells Fargo in Spring Lake, New Jersey, filed a preliminary notice in federal court this week in an attempt to overturn last month's arbitration decision.
In that ruling, FINRA arbitrators sided with Wells Fargo, concluding that the firm was entitled to recoup $1.66 million in compensatory damages, plus interest, costs and attorneys' fees stemming from promissory notes that had not been repaid following Caputo's dismissal from the firm.
Caputo had denied that charge, and responded in a counterclaim alleging that Wells Fargo had in fact breached its end of the contract. He also leveled a litany of allegations at Wells, including "unconscionability based on fraudulent inducement, unjust enrichment, breach of implied duty of good faith and fair dealing, defamation, fraudulent inducement to accept employment, expungement and New Jersey employment law breach."
In his counterclaim, Caputo requested compensatory damages of at least $1 million, as well as the dismissal of Wells Fargo's claims.
He also sought the "expungement of the false and defamatory Form U5 from his CRD record," according to the arbitration panel's summary of the case.
The panel rejected Caputo’s requests.
Wells Fargo declined to comment on the case, and Caputo's attorney, Mark Kriegel, did not respond to email and phone messages seeking comment. Caputo could not immediately be reached for comment, and his current employer, National Securities Corporation, did not immediately respond to a request for comment.
The dispute with Wells Fargo dates at least to December 2014, when Caputo was discharged from the wirehouse, according to FINRA BrokerCheck records.
In the Form U5 portion of Caputo's BrokerCheck record, Wells Fargo cites "concerns regarding FA's recommendations for customers to change from one long-term product to another" in describing the conditions of his termination. Wells Fargo then notes variable annuities and mutual funds under the "product type" section of the form.
Caputo's registration with Wells Fargo ended about three weeks later, on January on Jan. 6, 2015, according to BrokerCheck.
FINRA reports that Wells Fargo filed its arbitration claim "on or about" Aug. 4, 2015, claiming that Caputo had breached his contract for failing to repay money owed under promissory notes that Wells Fargo had offered.
In the preliminary motion filed this week, Caputo's attorney argued that the arbitration "award reflects a forfeiture of promised remuneration, including remuneration fully earned for services rendered, as a result of Wells Fargo's discharge of Mr. Caputo at will, absent any just cause to do so."
Caputo's attorney indicated that a brief in support of the motion to overturn the arbitration decision would be submitted to the court in the coming days.
