Wells Fargo fined $22 million for alleged whistleblower retaliation

Wells Fargo & Co. has been fined more than $22 million by the US Department of Labor for allegedly firing a senior executive from its commercial banking unit after the employee reported to management of the business concerns about misconduct.

The Department of Labor’s Occupational Safety and Health Administration, which imposed the penalty, ordered the bank to pay a Chicago-based whistleblower a series of damages, including back wages, interest, lost bonuses and benefits, and compensatory damages.

Wells Fargo disagrees with the finding and intends to appeal to an administrative judge, a bank spokeswoman said. Bank employees are encouraged to report concerns, she said, adding that Wells Fargo was conducting prompt and thorough investigations.

OSHA says Wells Fargo unlawfully fired the manager when the unnamed employee reported being instructed to falsify customer information and raised concerns about price-fixing and collusion on interest rates to managers and a business ethics line.

The bank terminated the employee in 2019, first offering no reason for the termination and then saying the termination was part of a restructuring process, OSHA said. Investigators later determined that the firing was not consistent with the firings of other managers let go during this process.

The employee filed a complaint with OSHA, alleging retaliation under the whistleblower protection provisions of the Sarbanes-Oxley Act, the agency said. OSHA’s Whistleblower Protection Program enforces the Sarbanes-Oxley whistleblower provisions, protecting employees from retaliation for reporting workplace violations of safety and health, securities, taxes, criminal antitrust and anti-money laundering laws, among others.

The fine was particularly significant for OSHA, said Jordan Thomas, an attorney who helped establish the Securities and Exchange Commission’s whistleblower program who now works at SEC law firm Whistleblower Advocates PLLC.

“Whistleblower advocates view this substantial penalty as a welcome sign of life at OSHA and that Wall Street will not be given a pass for workplace violations,” Thomas said. “This is a big win that will help other financial whistleblowers in the same situation.”

San Francisco-based Wells Fargo has been subject to other regulatory action in recent years. In 2020, he reached a $3 billion settlement with the Justice Department and the SEC over his long-running fake accounts scandal. In September 2021, regulators fined Wells Fargo $250 million for lack of progress in addressing longstanding issues with its mortgage business. And in May, the bank agreed to pay $7 million as part of a settlement with the SEC over alleged problems in a new anti-money laundering system that let suspicious transactions escape initial notice. .

Write to David Smagalla at [email protected]

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