Wells Fargo Investigates Claims of Retaliation vs. Whistleblowers
Wells Fargo is investigating possible cases of retaliation against employees who spoke up about illegal sales practices, Chief Executive Tim Sloan said Thursday.
Sloan, who took over from John Stumpf last month as the bank tries to put a phony-accounts scandal behind it, apologized to employees who may have faced such retribution.
"I want to be clear: retaliation is unacceptable," Sloan told 2,000 employees in prepared remarks at a town hall meeting in Des Moines. "It's against our policy, and it is totally unacceptable to me personally. It will not be tolerated at Wells Fargo."
Sloan said an internal investigation into complaints to an ethics hotline had found that "the majority of cases" so far were handled appropriately, but some may not have been.
"There are some instances where we have questions so we are doing further investigation of those matters," Sloan said. "We are looking into any and all allegations of retaliation, and we will take appropriate actions based on what we find."
Wells has been sued by former employees who allege they were fired after contacting an ethics hotline to report on high-pressure sales tactics. One lawsuit filed by six former employees in federal court seeks $7.2 billion for employees nationwide who were allegedly fired or demoted for refusing to open fake accounts to meet sales quotas.
Wells agreed in September to a $190 million settlement with the Los Angeles City Attorney, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. The bank said that it had fired 5,300 employees for opening 2 million phony bank and credit card accounts for consumers who never asked for them from 2011 to 2015.
Last week, three Democratic lawmakers sent a letter to Wells asking for more information about the employee firings.
The lawmakers said Wells may have filed inaccurate or incomplete reports to the Financial Industry Regulatory Authority on 200 employees who were associated with the fake account openings. The reports, known as Form U5s, can hurt employees' ability to get another job in the industry.
Sens. Elizabeth Warren, D-Mass., Ron Wyden, D-Ore., and Robert Menendez, D-N.J., said in the letter that they were looking into whether Wells sought to conceal information from regulators about the firing of employees, including when the bank first learned about the illegal sales practices.
Sloan described the bank's knowledge of potential retaliations in vague terms.
"We've heard very concerning reports that there have been cases where the EthicsLine did not serve as the safe haven it is intended to be, and also heard allegations that some team members experienced retaliation after having contacted the EthicsLine," Sloan said. "On behalf of our entire leadership team, I want to apologize for any concerns that may have resulted from weaknesses in our EthicsLine."
Wells has conducted an "end-to-end" review of its ethics hotline and made changes to the review process in consultation with a third-party independent expert, Sloan said. The review and changes to the hotline are being "validated" by Wells' internal audit team, he said.
Sloan and other top executives have met with thousands of employees to reassure the rank-and-file that the bank can rebound from the massive hit to its reputation.
He told employees he had a list of seven priorities to help rebuild trust in the bank.
"We all need to be more aware of our colleagues and their needs, especially as we work through this time of self-reflection and transition," Sloan said. "The goal for all of this is to return our company to greatness."