Wells Fargo & Co has fired hundreds of brokerage employees for improper sales practices, widening the scope of a scandal which the fourth-largest U.S. bank has characterized for the time being as a retail banking problem.
In a letter to Wells Fargo Chief Executive Tim Sloan, Senators Elizabeth Warren, Ron Wyden and Robert Menendez questioned the bank’s disclosures about those employees’ dismissals in required regulatory filings.The letter is the first indication that customers of the brokerage business, known as Wells Fargo Advisors, may also have been affected by the bank’s scandal.
Wells Fargo said in September it would pay $185 million in penalties and $5 million to customers for opening up to 2 million deposit and credit-card accounts in customers’ names without their permission.The San Francisco-based bank also added that it fired 5,300 workers for improper sales practices over a period of five years.
The Financial Industry Regulatory Authority (FINRA), which regulates brokerages and securities dealers, told congressional staff that it had received dismissal documents known as Form U5s for more than 600 of those fired Wells Fargo employees. However, only 207 of them contained details indicating they were fired for practices that led to bogus accounts.The incomplete U5 filings may have deprived regulators of information that could have allowed them to uncover and stop the “illegal activity” sooner, the senators said.
Wells Fargo spokeswoman Jennifer Greeson Dunn said multiple investigations were underway, including an internal review. The bank has been working for years to stop wrongful sales practices and is taking steps to repair the damage, she added.