The Financial Industry Regulatory Authority (FINRA) introduced a hotline Friday for certain former Wells Fargo employees who were fired amid news that bank representatives had been opening fake, unauthorized accounts for customers.
In September, federal regulators ordered the San Francisco-based bank to pay the U.S. $185 million in penalties and $5 million to customers it defrauded by pressuring employees to meet aggressive sales quotas by opening the unauthorized customer accounts. Responding to this pressure, Wells Fargo employees opened up some two million fake accounts and charged customers maintenance fees on those accounts.
The bank subsequently fired about 5,300 employees for opening the accounts between 2011 and 2016. About 200 of those employees were licensed to sell securities. Some of the employees have sued the bank or filed regulatory complaints alleging that they were fired only after reporting the bogus accounts.
Additionally, several whistleblowers who called an internal ethics hotline Wells Fargo maintained alleged they were fired in retaliation for voicing their objections to the bank’s business practices.
FINRA, the financial industry’s self-regulating authority, wants to hear from those whose securities registrations were terminated if they suspect Wells Fargo misreported their firing.
In a letter last month to Wells Fargo CEO Tim Sloan, Democratic Senators Elizabeth Warren, Ron Wyden, and Robert Menendez said evidence they received from FINRA indicated the bank may have wrongfully filed defamatory statements to retaliate against the employees for questioning its dubious sales practices.
FINRA requires financial firms to file a Form U5 termination notice that describes why the employee was fired. Some of the former Wells Fargo employees raised concerns that they did not receive a copy of their U5 termination form and/or their form contained false information.
The descriptions in the documents can have a giant impact on a financial professional’s ability to find employment elsewhere; therefore, employees are supposed to be able to review the U5 form before it is submitted to FINRA.