November 03, 2016

Wyden, Warren, Menendez Question Wells Fargo CEO about Accuracy of Reports with Financial Regulator

Senators Request Information About Whether the Bank May Have Taken Retaliatory Action Against Whistleblowers

Washington, D.C. – In a letter today to Wells Fargo’s new CEO, U.S. Senators Ron Wyden, D-Ore., Elizabeth Warren, D-Mass., and Bob Menendez, D-N.J. raised questions about the accuracy of Wells Fargo’s filings with the Financial Industry Regulatory Authority (FINRA) and claims of retaliation against whistleblowers relating to the termination of employees for creating more than two million unauthorized checking and credit card accounts.

As a major securities industry regulator, FINRA is responsible for writing and enforcing securities rules, as well as ensuring securities firms are complying with those rules. With five of its subsidiaries regulated by FINRA, Wells Fargo is required to notify FINRA when a registered employee is terminated or otherwise leaves the firm.

The senators noted that new information obtained from FINRA revealed that from 2011 to 2015, Wells Fargo filed more than 200 notices, known as Form U5s, with FINRA for employees who were fired for actions related to the unauthorized accounts scandal, some of whom allege they were fired for blowing the whistle on the scheme.

“These 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,” the senators wrote. “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.”

Recent news reports suggest that Wells Fargo may have violated FINRA rules by filing incomplete or inaccurate paperwork for many fired employees, raising questions about whether the company took retaliatory action by reporting defamatory information on whistleblowers.

The senators wrote, “These [news] accounts raise questions about the accuracy of Wells Fargo’s Form U5s for employees who were fired for engaging in illegal activity and for employees who appear to have been fired for blowing the whistle on illegal activity at Wells Fargo. If Wells Fargo did not report all appropriate information on all relevant employees who were fired for misconduct – or misreported information to FINRA on employees who were fired for reporting illegal activities - then the bank may have deprived FINRA and other regulators of information that could have allowed them to uncover and stop the illegal activity at Wells Fargo well before the September 2016 CFPB settlement.”

The letter requests that Wells Fargo CEO provide answers to a series of questions about the senators’ concerns.

A PDF copy of today's letter is attached and available here.