In Sen. Elizabeth Warren’s latest attack on Wells Fargo & Co., she and U.S. Senate colleagues are questioning whether the bank filed misleading disclosures on terminated employees, and if it did so as retaliation for complaints about its aggressive sales tactics.
In a letter Thursday to Wells Fargo Chief Executive Officer Tim Sloan, the Massachusetts lawmaker and two other Democrats asked whether the bank filed inaccurate reports to the Financial Industry Regulatory Authority. Brokerages, including units of banks, that are registered with Finra must file paperwork with the regulator when they terminate employees.
“Currently available information suggests that the bank may have filed defamatory statements to retaliate against employees who questioned aggressive cross-selling practices and that those negative statements often dealt serious blows to the employees’ careers,” the senators wrote. “If Wells Fargo submitted false or incomplete information about the fired employees in its mandatory disclosures to FINRA, the bank may have violated FINRA rules and misled regulators about the scope of the fraud.”
Warren has been on a tirade against Wells Fargo since regulators announced in September that the bank would pay $185 million to settle allegations that it may have opened more than two million accounts without customers’ authorization. She has urged agencies, including the Securities and Exchange Commission, to investigate whether the San Francisco-based bank might have punished workers who complained that employees were cutting corners to meet unattainable sales goals.
“We have a zero tolerance for retaliation against team members and we have a firm non-retaliation policy,” Wells Fargo spokeswoman Jennifer Dunn said in an email.
The bank is investigating claims about retaliation, reviewing its internal ethics processes and has created a special team to assist former employees, she said. Wells Fargo has “been working for years to stop wrongful sales practices behavior” before its settlements with regulators over the matter, Dunn added.
Warren’s letter to Sloan was also signed by Sen. Robert Menendez of New Jersey and Sen. Ron Wyden of Oregon. In questioning whether whistleblowers were wrongly fired, the lawmakers cited media reports, including National Public Radio interviews of former employees. In one instance, a terminated worker who said she spoke out was listed as failing to perform her job duties in a report that Wells Fargo filed with FINRA, according to NPR.
The senators said they have completed their own review of Finra termination reports filed between 2011 and 2015, and found the disclosures show Wells Fargo had “ample information” about the severity of the bogus account practices for years. Wells Fargo filed more than 200 reports for employees who were fired for actions related to opening accounts without customers’ knowledge, the letter said.
“As we already said in two congressional hearings, Wells Fargo has been working for years to stop wrongful sales practices behavior well before our settlements” with regulators, Dunn said.
Wells Fargo said earlier Thursday that the SEC, which reviews companies’ disclosures to investors, has also opened an investigation into the bank. Warren is among lawmakers who have urged the regulator to examine whether Wells Fargo should have told shareholders it was under investigation before the announcement of the $185 million fine.