A judge’s finding that Financial Industry Regulatory Authority (Finra) routinely gave outside counsel for Wells Fargo a selective subset of arbitrators to choose from has sparked a Congressional inquiry.

Senate Banking Committee Member Elizabeth Warren (D-Mass.) and Rep. Katie Porter, (D-Calif.) have asked Finra to provide details on its arbitration process after a judge found that Wells Fargo and its outside attorney, Terry Weiss, had a secret arrangement with Finra to keep certain people off the list of arbitrators in all of his cases, according to documents he turned over to the arbitration panel and the claimants’ attorney.

Now, Warren and Porter want details on the communications regarding any favoritism Finra might have shown to Wells Fargo’s lawyer and whether the company requested arbitrators to be removed from the case, the Wall Street Journal reported, citing a letter Warren and Foley sent to Finra’s top executives last week.

“We have long had concerns about Finra’s ability to effectively enforce rules against fraudulent and abusive behavior by brokers and dealers,” they said in a Wednesday letter to Finra president and chief executive officer Robert Cook, according to the Journal.

The lawmakers also wrote that the case presents “troubling new allegations about the atrocious behavior of Wells Fargo,” the newspaper said.

Finra and Wells Fargo have both denied the allegations of a secret agreement.

At the heart of lawmakers’ concern is a ruling from Judge Belinda Edwards of the Superior Court of Fulton County in Georgia, which concluded that “Wells Fargo and its counsel manipulated the Finra arbitrator selection process.”

As a result, Edwards granted a motion to vacate a 2019 arbitration award in Wells Fargo’s favor against two investors seeking to be made whole from losses totaling $1,178,446 in a merger arbitrage investment.

Edwards also found that both Wells Fargo Advisors LLC and Wells Fargo Clearing Services LLC and their outside counsel committed fraud and perjury.

According to court documents, Weiss admitted that Finra, a private entity that acts as a self regulatory organization for the securities industry, provided him with a “subset” of arbitrators in which at least three were removed from the list provided to the claimants.

Edwards ruled that "Wells Fargo and its counsel manipulated the Finra arbitrator selection process in violation of the Finra Code of Arbitration Procedure, denying the investors their contractual right to a neutral, computer-generated list of potential arbitrators."

Added Edwards, "Permitting one lawyer to secretly redline the neutral [arbitrator] list makes the list anything but neutral, and calls into question the entire fairness of the arbitral forum."

Finra denied the court’s findings. “There has never been any agreement between Finra Dispute Resolution Services and attorney Terry Weiss regarding appointment of arbitrators. Any assertions to that effect are false,” Finra spokeswoman Michelle Ong said when Edwards ruled on the case at the end of January.

“As the neutral administrator, we continually strive to make the Finra forum the fairest, most efficient program available and stand behind the integrity of our neutral list selection process,” Ong added.

Wells Fargo said it intends to appeal the decision. “Finra has well-established rules for admitting arbitrators to its roster and the process is fair to all parties. Wells Fargo Advisors followed this process and we intend to appeal this decision,” spokeswoman Jackie Knolhoff told Financial Advisor.

Michael Edmiston, president of the Public Investors Advocate Bar Association (PIABA), said the attorneys trade group was calling on Congress and the Securities and Exchange Commission to investigate the findings in the court decision.

“The problem here is you don’t know the scope of how badly the system is stacked against investors,” said Edmiston, who is a former senior staff attorney at Finra. “You don’t know what other secret agreements firms have with Finra. It is just this one attorney or multiple attorneys with numerous firms who have created this secret process. You literally just do not know.”