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Published: Fri, September 30, 2016
Economy | By Melissa Porter

Potential Wells Fargo Whistleblowers Were Fired Over Phony Account Scandal


John Stumpf, chairman and CEO of Wells Fargo, is sworn in prior to testifying before the Senate Banking, Housing and Urban Affairs Committee on September 20 in Washington.

Berkshire has been Wells Fargo's largest shareholder, and in the past Buffett has praised the bank's CEO, John Stumpf.

Most Americans were shocked when they learned that thousands of Wells Fargo employees had opened millions of fake accounts.

Earlier this month, the lender agreed to pay $190 million in penalties and customer payouts to settle a case in which bank employees created credit, savings and other accounts without customer knowledge.

"I am deeply sorry we failed to fulfil our responsibility", Stumpf said in a prepared statement. Fellow Senate Finance panelist and Democrat Jon Tester told Stumpf, "You have done something I've never seen in 10 years: You have united this committee - and not in a good way". Stumpf refused to offer an opinion on Tolstedt's conduct or whether she should receive the compensation she is set to receive, saying it was a matter for Wells Fargo's board of directors.

The question is this: How do 5300 employees commit fraud without managers and executives knowing it?

The inquiry revolves around sales incentives that encouraged aggressive practices in which bank employees were nudged to sell multiple products to individual customers. The employees created the fraudulent accounts to meet bank quotas and were allegedly threatened with firing if they didn't comply. His hand was bandaged and in a splint after "roughhousing" with his grandkids, Wells Fargo spokeswoman Jennifer Dunn said.

"They ruined my life", said Bill Bado, a former staff member at a Pennsylvania branch.

"For years Wells Fargo employees have described a management culture characterized by "mental abuse, ' being forced to work overtime 'for what felt like after-school detention" during the week and on weekends, and being 'severely chastised and embarrassed in front of 60-plus managers'".

The House committee's investigation will also include interviewing a number of witnesses ahead of Stumpf's testimony.

Los Angeles City Attorney Michael Feuer, also scheduled to testify at the hearing, is expected to say that his office heard from Wells Fargo customers who said their unauthorized accounts were sent to debt-collection agencies and their credit reports were hurt as a result.

No other major banks have been accused by regulators of widespread opening of phony accounts like Wells Fargo has been.

A class-action lawsuit filed against Wells Fargo last week might be hamstrung at the starting line, legal experts say. Mr. Stumpf said "I don't remember that one".

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. The 26-year-old single parent of two young boys was sacked soon after she contacted the company's ethics line about illegal sales practices she witnessed. He promised: "I will make it right".

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