I called the Wells Fargo ethics line and was fired — Wells Fargo admitted to firing 5,300 employees for engaging in these shocking tactics
September 21, 2016: 11:55 AM ET
Millions of phony accounts. Fake bank card PIN numbers. Fictitious email accounts.
Wells Fargo admitted to firing 5,300 employees for engaging in these shocking tactics. The bank earlier this month paid $185 million in penalties and has since apologized.
Now CNNMoney is hearing from former Wells Fargo () workers around the country who tried to put a stop to these illegal tactics. Almost half a dozen workers who spoke with us say they paid dearly for trying to do the right thing: they were fired.
“They ruined my life,” Bill Bado, a former Wells Fargo banker in Pennsylvania, told CNNMoney.
Bado not only refused orders to open phony bank and credit accounts. The New Jersey man called an ethics hotline and sent an email to human resources in September 2013, flagging unethical sales activities he was being instructed to do.
Eight days after that email, a copy of which CNNMoney obtained, Bado was terminated. The stated reason? Tardiness.
HR official describes ‘retaliation’
Retaliating against whistleblowers is a major breach of trust. Ethics hotlines are exactly the kind of safeguards put in place to prevent illegal activity from taking place and provide refuge to employees from dangerous work environments.
Wells Fargo CEO John Stumpf made precisely that point on Tuesday when he testified before angry Senators.
“Each team member, no matter where you are in the organization, is encouraged to raise their hands,” Stumpf told lawmakers. He mentioned the anonymous ethics line, adding, “We want to hear from them.”
But that’s not the experience of some former Wells Fargo workers.
These two WELLS FARGO ATM machines in Antarctica serve 250 winter residents who have 13,938 checking accounts and credit cards. (just kidding)
One former Wells Fargo human resources official even said the bank had a method in place to retaliate against tipsters. He said that Wells Fargo would find ways to fire employees “in retaliation for shining light” on sales issues. It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions.
“If this person was supposed to be at the branch at 8:30 a.m. and they showed up at 8:32 a.m, they would fire them,” the former human resources official told CNNMoney, on the condition he remain anonymous out of fear for his career.
Clint Eastwood shows his lynching scar in a scene from the film ‘Hang ‘Em High’, 1968.
CNNMoney spoke to a total of four ex-Wells Fargo workers, including Bado, who believe they were fired because they tipped off the bank about unethical sales practices.
Another six former Wells Fargo employees told CNNMoney they witnessed similar behavior at Wells Fargo — even though the company has a policy in place that is supposed to prevent retaliation against whistleblowers. CNNMoney has taken steps to confirm that the workers who spoke anonymously did work at Wells Fargo and in some cases interviewed colleagues who corroborated their reports.
“I endured harsh bullying … defamation of character, and eventually being pinned for something I didn’t do,” said Heather Brock, who was fired earlier this month as a senior business banker at a Wells Fargo branch in Round Rock, Texas.
One such former employee was fired after flagging issues directly to Stumpf, according to Senator Bob Menendez.
At the Senate hearing, Menendez read the New Jersey woman’s 2011 email to Stumpf, where she described improper sales tactics she felt were “wrong.”
“Did you read that email?” Menendez asked Stumpf.
“I don’t remember that one,” Stumpf replied.
“Okay, well she was fired. … So much for the safe haven,” Menendez said.
Several senators spoke about the plight of the mostly 5,300, low-level employees who were fired related to the scandal.
The firing certainly took a huge toll on Bado’s life. It put a permanent stain on his securities license, scaring off other prospective bank employers. Today, the New Jersey man’s house is on the verge of being foreclosed on and he’s working part-time, at Shop-Rite.
“You wonder where the justice is,” Bado said.
Ken Springer, a former FBI agent who runs a firm that offers a whistleblower hotline service, was alarmed by the allegations made by former Wells Fargo employees.
“That’s retaliation. It’s a big problem — and a perfect example of what shouldn’t happen,” Springer said. “It looks like there’s been a terrible breakdown of checks and balances at Wells Fargo.”
In response to CNNMoney’s report, a Wells Fargo spokeswoman said: “We do not tolerate retaliation against team members who report their concerns in good faith.” She emphasized that employees are encouraged to immediately report unethical behavior to their manager, HR representative or 24-hour ethics line.
‘Excessive tardiness’ eight days after HR email
Wells Fargo confirmed to CNNMoney that Bado had worked there. However, the bank declined to comment on why Bado left and and on the ethics complaint with corresponding report number he cited in emails. “Everything submitted to the EthicsLine is investigated,” a Wells Fargo spokeswoman said.
While ethics complaints are supposed to be confidential, documents show that Bado did speak out before he was fired. On September 19, 2013, Bado wrote an email to a Wells Fargo HR rep and copied his regional manager, where he detailed improper sales tactics.
Documents show Bado was fired — for “excessive tardiness” — just eight days later.
“I have been asked on several occasions to do things that I know are not ethical and would be grounds for discharge,” Bado said in the email to HR.
He said a branch manager on “many occasions” asked him to send out a debit card, “pin it,” and enroll customers in online banking — “all without the customers (sic) request or knowledge.” Those are precisely the same practices that regulators fined Wells Fargo for three years later and that senators grilled the bank over this week.
Lose, lose situation for Heather Brock
Brock, the business banker from Texas, told CNNMoney she experienced a similar situation. The 26-year-old single parent of two young boys was fired soon after she contacted the company’s ethics line about illegal sales practices she witnessed.
Wells Fargo also confirmed Brock used to work at the company but declined to comment further.
Brock was fired earlier this month, with Wells Fargo accusing her of falsifying documents — a charge Brock emphatically denies. Brock said the company bullied her into admitting she did something wrong.
A current Wells Fargo employee who works in Brock’s branch vouched for her version of events.
“That’s really scary when you’re with a big corporation like this and HR doesn’t have your back,” said the current employee, who wished to remain anonymous so as not to get fired as well.
Brock is hoping her story forces meaningful change at Wells Fargo.
“You lose if you do complain and you lose if you don’t. What does a powerless employee do?” Brock said.
— To reach the author of this article email Matt.Egan@cnn.com
Wells Fargo CEO John Stumpf Told to Resign by Sen. Warren
Amid tense questioning on Capitol Hill this morning, Sen. Elizabeth Warren, D-Mass., told Wells Fargo CEO John Stumpf that he should resign and face criminal charges amid a scandal over allegations that bank employees opened accounts without customers’ authorization.
Warren was far from the only senator to criticize the bank chief, with Republicans and Democrats both grilling him for over two hours.
Sen. Jon Tester, D-Mont., said Stumpf achieved something that he hadn’t seen in his 10 years on the committee: unity.
“You have done something that’s never happened and united this committee on a major topic … and not in a good way,” Tester told Stumpf.
The hearing is the most public appearance by the embattled CEO since the scandal erupted earlier this month. A second panel examined regulators’ actions regarding the scandal.
Stumpf’s opening remarks varied from those leaked to the press on Monday night and in one respect went further by including language that the Wells Fargo board could “hold senior leadership accountable” for any actions it deemed inappropriate.
He also announced that the company would extend its review of customer accounts to include 2009 and 2010. It previously reviewed accounts dating back only to 2011.
On Sept. 8, regulators in Washington and California fined the bank $185 million after they said an internal review found that employees opened or applied for more than 2 million bank accounts or credit cards without customers’ knowledge or permission from May 2011 to July 2015. The bank confirmed that it fired some 5,300 employees in connection to the allegations.
While Democratic Senate Banking Committee members were widely expected to grill Stumpf over the allegations, they were joined by their Republican colleagues in repeatedly calling the activity fraud.
Senator Elizabeth Warren speaks with Senator Joe Donnelly before John Stumpf testifies in front of the Senate Committee on Banking, Housing, and Urban Affairs in Washington, Sept. 20, 2016. “Can you get a rope?” Bloomberg via Getty Images
Warren Tells CEO to Resign
Unsurprisingly, the fiercest language came from Warren, a consumer advocate who has been critical of the nation’s big banks.
Warren, who at times became impassioned, told Stumpf that he should leave his post and face a criminal investigation.
“You should resign,” she said. “You should give back the money that you gained while this scam was going on, and you should be criminally investigated by the [Department of Justice] and the [Securities and Exchange Commission].”
An SEC spokesman, John Nester, told ABC News that the commission “can neither confirm or deny the existence or nonexistence of investigations” that it is conducting. A Wells Fargo representative declined to comment.
Sen. Bob Corker, R-Tenn., told Stumpf that he would be engaging in “malpractice” if the bank doesn’t “claw back” money that it paid to executives during the period that the accounts were being opened without customers’ permission.
The salaries and bonuses of Stumpf and other executives, especially Carrie Tolstedt, formerly the head of the bank’s community banking division, whose retirement was announced in July, have become the subject of scrutiny in recent weeks.
Senators have repeatedly cited a figure from a report by Fortune magazine on Sept. 12, which claims that Tolstedt will leave the bank “with $124.6 million in stock, options and restricted Wells Fargo shares.”
The bank did not immediately return a request for comment on the figure.
The ability to claw back the compensation does appear to be a viable option, with Stumpf telling the panel that “the Wells Fargo Board … has the tools to hold senior leadership accountable, including me and Carrie Tolstedt, the former head of our retail banking business.”
Additionally, in a filing with the SEC earlier this year reviewed by ABC News, the bank said that it had “strong recoupment and clawback policies in place, designed … [to] discourage our executives from taking imprudent or excessive risks.”
“I want to be clear on this: I will respect and accept the decision of the board,” Stumpf told senators today.
Many senators, however, were incensed when he later deferred to the board whether any actions would be taken. Stumpf is the board’s chairman.
Who’s to Blame?
Corker was just one of several Republicans who were critical of Stumpf and Wells Fargo.
Sen. Jerry Moran, R-Kan., told the CEO that he should stop scapegoating low-level employees for the alleged misconduct.
“I’m not scapegoating, but that is not part of our culture,” Stumpf responded.
Last week, in an interview with The Wall Street Journal, Stumpf reportedly blamed the opening of the accounts on employees.
During the Senate hearing today, he said that he had been misunderstood during that interview.
Throughout the hearing, he seemed to try to shift blame to the bank’s product sales goals program, which will be eliminated as of Jan. 1, 2017.
He said, “We should have done more sooner to eliminate unethical conduct or incentives that may have unintentionally encouraged that conduct.”
In his opening remarks, Stumpf took time to thank the “268,000 team members” who work for the bank.
During the hearing, Stumpf wore a brace and a bandage. Wells Fargo spokeswoman Jennifer Dunn declined to give further details about the injury. Earlier she reportedly told The Charlotte Observer that he was hurt playing with his grandchildren.
Examination of the Regulators
During the second half of the hearing, lawmakers questioned leaders of three oversight agencies involved in the Wells Fargo scandal. Stumpf was not present.
Richard Cordray, the director of the Consumer Financial Protection Bureau, said the fine imposed on Wells Fargo – $100 million, the largest in the five-year-old agency’s history – was justified.
“Some have said it should be higher,” Cordray said. “But it is justified here by the outrageous and abusive nature of these fraudulent practices on such an enormous scale.”
The Senate hearing is the latest development in the scandal that has engulfed the bank in recent weeks.
The allegations came to light when the Consumer Financial Protection Bureau fined the bank. The Office of the Comptroller of the Currency slapped the bank with a $35 million fine, and the county and city of Los Angeles fined it an additional $50 million.
At the time, the bank said that it regretted and took responsibility for “any instances where customers may have received a product that they did not request.”
The bank has fired some 5,300 employees in connection to the allegations; however, it sought to downplay the terminations, with an official telling ABC News that “the number terminated represents about 1 percent of this workforce over the five year period.”
Investigations have been opened by the FBI and federal prosecutors in New York and California, as well as the House of Representatives Financial Services Committee, which will hold a hearing of its own. A date for that hearing isn’t yet known.
ABC News’ Mary Bruce, Ali Rogin and Margaret Chadbourn contributed from Washington.
Wells Fargo CEO John Stumpf on Tuesday faced nearly three hours of grilling during a Senate Banking Committee hearing on the bank’s allegedly illegal sales practices.
Stumpf faced a barrage of criticism from both sides of the aisle. Here are four key moments:
‘This is about accountability’
Not surprisingly, one of the most dramatic confrontations involved Democrat Elizabeth Warren, known for harsh rhetoric about big banks.
“This is about accountability,” said Warren, who accused Stumpf of “gutless leadership” andtold him he should resign.
“You haven’t returned a single nickel of your personal earnings. You haven’t fired a single senior executive,” Warren said.
“Instead, evidently, your definition of accountable is to push the blame to your low-level employees who don’t have the money for a fancy PR firm to defend themselves,” she said.
Stumpf acknowledged Tuesday that steps the bank took to crack down on bad behavior were not enough. But he noted changes the bank has made to prevent similar behavior in the future, such ending sales goals for retail bankers starting next year.
‘Pumping up Wells’ stock price’
Warren also noted Stumpf’s heavy focus as CEO on cross-selling, a practice of getting multiple products in a customer’s hands.
During the period when the alleged abuses were taking place, Wells Fargo’s stock rose as it promoted its cross-selling prowess to investors, Warren said. Warren said Stumpf enjoyed millions of dollars in gains as the stock rose.
Cross-selling, Warren said, “is all about pumping up Wells’ stock price.”
“And when it all blew up, you kept your job, you kept your multimillion-dollar bonus and you went on television to blame thousands of $12-an-hour employees who were just trying to meet cross-sell quotas that made you rich,” she said.
Stumpf said cross-selling is a way of deepening relationships with customers and that the bank never directed or wanted employees to sell products customers did not want.
‘You were never told about that?’
Lawmakers, including Louisiana Republican David Vitter, pressed Stumpf on when he knew employees were opening accounts without customers’ authorization to meet sales goals.
Wells Fargo has said it fired 5,300 people between January 2011 and March 2016 for secretly opening accounts.
On Tuesday, Stumpf disclosed he didn’t learn about the behavior until 2013, a remark that drew this comment from Vitter:
“In 2011, about 1,000 employees were fired over this. … So, 1 percent of a whole, big part of your business was fired over fraud, and you were never told about that?”
“One percent of a big part of your business is fired over fraud, but that doesn’t rise to your level?”
Stumpf noted it was a good question, but called the matter a “problem of focus and not of size.” Stumpf also noted the firings were dealt with inside the community banking unit, not at his level.
‘It’s not a square deal’
Joe Donnelly, an Indiana Democrat, was among lawmakers who criticized the bank for firing low-level employees but no senior executives.
Carrie Tolstedt, who headed the community banking unit and plans to retire at the end of this year, made $9.1 million in salary, bonus and stock awards in 2015. According to the bank, she has roughly $96 million in Wells Fargo stock, unexercised stock options and unvested and unpaid stock awards.
“It’s not a square deal when the people that are fired are the tellers who make 15 bucks,” while senior executives talk away with millions of dollars, Donnelly said. “How do you fire someone making 15 bucks and not the person” over the unit?
Stumpf called it an important question but drew a distinction.
“There’s something very different about violating our code of ethics and putting customers at risk and being dishonest,” Stumpf said, “versus someone who did not spend enough time making sure that this issue had been closed.”
Read more here: http://www.charlotteobserver.com/news/business/banking/bank-watch-blog/article103036832.html#storylink=cpy
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