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Wells Fargo must pay more than $22 million to a former top banking executive who claimed he was retaliated against for reporting financial fraud.
According to a press release issued Thursday by the Occupational Safety and Health Administration (OSHA), the payout to the unnamed senior manager in the company's Chicago-based commercial banking segment represented "back wages, interest, lost bonuses and benefits, front pay, and compensatory damages." Wells Fargo fired the manager in 2019 after he filed a complaint with OSHA.
Following an investigation, OSHA ruled that the manager was a covered whistleblower under the requirements of the Sarbanes-Oxley Act, and that his or her removal constituted improper retribution by Wells Fargo against a whistleblower.
Wells Fargo stated in a statement that it disagreed with OSHA's findings, adding that they were not based on an evidentiary hearing. According to a bank representative, the bank will file an appeal with an administrative law judge.
“Wells Fargo has zero tolerance for acts of retaliation, and employees are encouraged to report concerns, which will be promptly and thoroughly investigated,” the spokesperson said in an emailed statement.
According to OSHA, while still employed at Wells Fargo, the senior manager expressed concerns about financial misbehaviour, including wire fraud, to bank area managers and the bank's ethics hotline.
“The manager expressed concerns that they were directed to falsify customer information and alleged that management was engaged in price fixing and interest rate collusion through exclusive dealing,” OSHA said.
According to OSHA, Wells Fargo said that the decision to remove the manager was part of a reorganisation process. However, the agency decided that the termination was inconsistent with the bank's treatment of other managers ousted under the programme during its examination.
“The evidence demonstrates Wells Fargo took retaliatory action against this senior manager for repeatedly expressing concerns about financial management they believed violated federal laws,” said Doug Parker, assistant secretary of labor for occupational safety and health, in the press release. “The Sarbanes-Oxley Act protects employees from retaliation in these very circumstances, and the Department of Labor will not tolerate employers who violate the law and illegally terminate workers that exercise their rights under the law.”
In other recent incidents where internal whistleblowers exposed misbehaviour, Wells Fargo paid settlements.
In September 2021, the bank paid the DOJ $72.6 million to settle claims that it falsely overcharged hundreds of commercial customers who used its foreign exchange services. A whistleblower filed a complaint with the DOJ under the Financial Institutions Reform, Recovery, and Enforcement Act in that case (FIRREA).
In 2017, Wells Fargo was compelled to pay a former branch manager $577,500 in back wages, damages, and other expenses after she blew the whistle on alleged unlawful conduct by several of her employees. That case was linked to the fake accounts scandal, which cost Wells Fargo $3 billion in criminal and civil fines and resulted in personal penalties imposed by the Office of the Comptroller of the Currency on multiple top Wells Fargo executives, including a $17.5 million fine on former Chief Executive John Stumpf.
By fLEXI tEAM