Senators Ask Wells Fargo CEO About Filings on Employee Terminations

By Jeff Bater

Nov. 3 — Three U.S. senators sent a letter to the new head of Wells Fargo Nov. 3 asking about the accuracy of regulatory filings made by the bank on employees fired for creating unauthorized accounts.

Sens. Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Robert Menendez (D-N.J.) raised questions about the accuracy of bank filings with the Financial Industry Regulatory Authority (FINRA) in their letter to Tim Sloan, who replaced John Stumpf as CEO after the scandal broke.

Wells Fargo is required to file a Form U5 when an employee is terminated or otherwise leaves the company. The senators noted that new information obtained from FINRA revealed that from 2011 to 2015, the bank filed more than 200 U5 reports with the self-regulatory body for employees who were fired for actions related to the unauthorized accounts scandal.

On the same day the letter was sent, Pennsylvania announced the bank would be suspended from investment or trading activities with its treasury department for one year, becoming the latest state to punish the company over the bogus accounts scandal.

Questions on Bank Response

The senators said the reports “confirm that Wells Fargo had ample information about the scope of fraudulent sales practices occurring at the bank long before the CFPB settlement, and they raise additional questions about Wells Fargo’s response to this illegal activity.”

“In addition, public reports indicate that Wells Fargo may have filed inaccurate or incomplete Form U5s for fired employees and that the bank may have done so to retaliate against whistleblowers,” the senators said. “If this is the case, then it would appear that Wells Fargo concealed key information from regulators that may have revealed the bank’s misdeeds long before the September 2016 settlement.”

Stumpf resigned in October after taking responsibility for the scandal involving the unauthorized opening of customer accounts by employees to meet sales goals. Wells Fargo said it fired 5,300 employees over the fake accounts.

FINRA is a nonprofit organization that acts as a regulator of the securities industry. The senators said the new data about the bank filings are significant because five subsidiaries of Wells Fargo are subject to FINRA rules.

Defamatory Statements in Retaliation?

”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,” they 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.”

To contact the reporter on this story: Jeff Bater in Washington at

To contact the editor responsible for this story: Michael Ferullo at

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.