Darren McFadden agrees to take lawsuit against Ameriprise to arbitration

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The effort by Cowboys running back Darren McFadden to recover money he believes what stolen from him by a financial adviser, already the subject of three lawsuits, will now include an arbitration proceeding.

According to the Northwest Arkansas Democrat Gazette, McFadden has placed his litigation against Ameriprise Financial Services on hold so that he can pursue an arbitration claim against the publicly-traded corporation that listed more than $11 billion in net revenues in its 2016 annual report.

Of course, McFadden doesn’t really want to pursue arbitration. McFadden and his lawyers apparently have concluded that he had no choice but to pursue that route against Ameriprise, possibly due to an arbitration agreement that Ameriprise drops into the various documents and paperwork that a new client is required to sign, regardless of whether they truly understand what they’re signing.

More and more large companies secure commitments from their customers to refer any claims to arbitration, since it removes the process from the hands of a jury of regular people who may not fully understand the process and who may make decisions based on sympathy for the “little guy” who is taking on the faceless corporate behemoth and/or a shrugging acceptance of the reality that the money the plaintiff wants will amount to pocket change for the large company that is being sued. In arbitration, a lawyer or former judge will hear the evidence and make a decision based on the facts and the law without sympathy or any other consideration influencing the outcome.

Ameriprise has found itself embroiled in the McFadden controversy because Ameriprise employed the financial planner who allegedly misappropriated millions from McFadden, dating back to 2008, when at the age of 20 he signed a $60 million contract with the Raiders. McFadden claims that Ameriprise negligently allowed the financial advisor to assume “unfettered power and ability to control all of McFadden’s income and financial transactions,” and that Ameriprise failed to inform McFadden upon the advisor’s departure from the company in 2010 that it had been investigating him for suspicious and unauthorized activity and allowed him to persuade McFadden to transfer his holdings to other firms, allegedly allowing the misappropriation of McFadden’s money to continue.

If you’ve made it this far, here’s the message to anyone who is being asked to sign a bunch of forms when doing business with a large company: Be on the lookout for arbitration agreements. Though some judges won’t force individuals to follow through on the take-it-or-leave-it term thrown into the fine-print boilerplate of a multi-page form contract, plenty of others compel the agreement to be honored, diverting the case from the legal system and dropping it into a mechanism that is far more favorable to the billion-dollar businesses that abhor the idea of facing a panel of average Americans who may hold the company accountable for its misdeeds.

I could say more about the political underpinnings of this concept and whether the average person who supports such an approach to American justice truly realizes that they are supporting such an approach to American justice, but I’ll stick to football instead.

8 responses to “Darren McFadden agrees to take lawsuit against Ameriprise to arbitration

  1. My first college internship was working for a wealth management team. The gentleman who ran the group had a variety of local athletes as clients.

    He told me a story about all the rounds of interviews he had to do with the agent of an extremely prominent local hockey legend. It was a multi-round process to whittle down who should be trusted with his money, and despite his success and reputation he was not chosen.

    I know Ameriprise isn’t the same company it used to be, but its former reputation from the American Express days still follows it around. McFadden’s agent should have been a part of this.

  2. If it’s non-binding arbitration, McFadden risks nothing. Quite possible he’ll get an offer that, after you consider legal costs and time value of money, is as good as a jury award. Nevermind the risk that a jury could award nothing.

  3. It really pays in the long run to have someone trustworthy handling your investments. My lady did a great job with my family’s stuff and is doing well for me. I made a pant load of cash since changing to an aggressive posture since the election.

  4. This is why I convert my money to 1 ounce gold bars and bury it in tin cans under the oak behind our retaining pond off Old Hardwick Road in Nichewaug.

  5. It’s very difficult to get any company to accept a relationship without the client accepting arbitration as the option to negotiate differences. Check your bank, cell phone provider, cable company, etc. They all do it. You are right that a jury typically would side with the little guy but the arbitrator has a responsibility to hold a fair hearing. Most arbitrators aren’t going to chance being disbarred (if an attorney) or discredited by holding a suspect hearing.

    All this being said, the NFL and all professional leagues have a responsibility to help their athletes as the athletes are the reason the leagues even exist. I know the NFL has an “approved advisor” list. However, to get on this list, you only have to pay a substantial fee not have a stellar reputation.

    I wish these players associations would consider creating their own financial firms that they would supervise. They have lawyers and accountants, why not financial planners?

  6. The New York Times did an article on this a few years ago, it was jaw dropping. Corporations very rarely lose in these arbitrations, even when there’s overwhelming evidence against them. The arbitrators are basically clients of the corporation. It’s in everything from agreements to employment contracts these days. Wholly unamerican.

    Read the fine print, people.

  7. Arbitration Agreements with a brokerage firm are required by FINRA. You cannot open an investment account without one.

    Ameriprise simply follows industry regulations as do all brokerage firms.

    The real story here is what were the compliance people doing to oversee this registered representative? Was McFadden handing this guy money outside of his Ameriprise account, i.e., not making out checks to Ameriprise itself?

    That is my guess. Because if he was then the compliance people at Ameriprise would have seen trades, money transfers, etc.

    In this case I can almost guarantee that McFadden was simply the victim of a thief and was too ignorant of how to handle money that he was easy pickings. A fool and his money are soon parted is unfortunately too true.

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