In Senate hearings in September, Wells Fargo confessed that it had fired 5,300 employees in the last five years for creating as many as 2 million bank and credit card accounts not authorized by customers.
In a highly publicized moment during the hearings, Sen. Elizabeth Warren, D-Mass., told Wells Fargo CEO John Stumpf: "You should resign ... and you should be criminally investigated,” as quoted by NPR.
Stumpf did indeed resign, and now his replacement, Timothy J. Sloan, is under the Senate spotlight as a result of new evidence in the case.
The evidence consists of hundreds of “U5” termination notices that Wells Fargo filed with the Financial Industry Regulatory Authority (FINRA), as required when brokers and other representatives leave the employ of a bank.
The problem is that the bank allegedly used the notices to retaliate against workers who tried to blow the whistle on the bank’s fraudulent activities. A negative comment on a U5 is can make it virtually impossible to find another job in the banking industry, explains The New York Times. “It’s like being blackballed,” said attorney Marc Schifanelli, who specializes in FINRA arbitration. “It can be a showstopper for a career.”
In a letter sent to CEO Sloan on Nov. 3, senators Elizabeth Warren, Robert Menendez, and Ron Wyden claim that the U5 forms “confirm that Wells Fargo had ample information about the scope of fraudulent sales practices” before it reached a settlement with the Consumer Financial Protection Bureau in September.
The letter goes on to say: “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 whistle-blowers. If this is the case, then it would appear that Wells Fargo concealed key information from regulators.”
In response, Wells Fargo spokeswoman Jennifer Greeson Dunn said that the bank had “zero tolerance for retaliation” and was looking into the claims.