The class action was filed by a former financial advisor alleging Wells Fargo cheated him out of deferred compensation.
The Sonn Law Group is investigating allegations that certain other broker dealers failed to pay financial advisors their earned deferred compensation. Please contact us today for a free review of your case.
In February 2014, Robert Berry, former financial advisor for Wells Fargo, left the company in order to launch his own firm. The agreement with Wells Fargo contained a forfeiture clause that allowed Wells Fargo to reclaim deferred compensation from financial advisors who joined another firm within three years of leaving Wells Fargo. According to Berry, a 20-year employee of Wells Fargo, the forfeiture clause allegedly caused him losses of close to $200,000.
Berry filed suit against Wells Fargo, claiming that the forfeiture clause violated the Employee Retirement Income Security Act (ERISA). Thousands of other former Wells Fargo financial advisors joined in the lawsuit who had also been forced to forfeit their deferred compensation.
ERISA governs vesting and non-forfeiture requirements on pension benefit plans. Berry’s lawsuit claimed that because the forfeiture clause contained in his agreement with Wells Fargo was unenforceable under ERISA, he was entitled to his deferred compensation. Alternatively, Wells Fargo claimed that ERISA did not cover the compensation plan.
After a three-year litigation battle, the parties settled for $79 million, which turns out to about $31,000 per class member. Wells Fargo continues to maintain that the ERISA does not cover its compensation plan. The company also stated that it has no plans to make substantive changes to how it handles deferred compensation. A Wells Fargo spokesperson stated that “resolving this matter is in the best interest of the company.”
The Sonn Law Group is currently investigating allegations that Wells Fargo failed to pay financial advisors their earned deferred compensation. For a free consultation, please call us now at 866-827-3202 or complete our contact form.