Consumer Fraud

Feds Order Wells Fargo To Reinstate Fired Whistleblower

Wells Fargo fraud Feds Order Wells Fargo To Reinstate Fired WhistleblowerFederal authorities ordered Wells Fargo on July 21 to reinstate and compensate a whistleblower fired in 2011 after she called the bank’s ethics hotlines to report suspected fraud.

Claudia Ponce de Leon, the former bank manager of a Wells Fargo unit in Pomona, California, lost her job after she reported at least three bankers working under her of opening unauthorized accounts for customers under her supervision.

The U.S. Occupational Safety and Health Administration (OSHA) does not name Ms. Ponce de Leon in its announcement, but an April 2017 story in American Banker indicated that federal regulators were likely to order her reinstatement. She is the second fired banker that OSHA has ordered Wells Fargo to reinstate after investigations uncovered evidence of illegal whistleblower retaliation.

OSHA investigators found evidence that Ms. Ponce de Leon lost her job because she raised concerns that the bankers “were opening customer accounts and enrolling customers in bank products without their knowledge, consent or appropriate disclosures.”

OSHA also found Wells Fargo fired her for reporting violations of at least one of the consumer financial laws implemented and enforced by the Consumer Financial Protection Bureau (CFPB). In all instances, Ms. Ponce de Leon’s actions were protected activities under the Sarbanes-Oxley Act and the Consumer Financial Protection Act of 2010, yet OSHA found those actions were contributing factors in Wells Fargo’s decision to fire her.

In addition to reinstating Ms. Ponce de Leon and clearing her personnel file, OSHA ordered Wells Fargo to pay her more than $577,500 in back pay, compensatory damages, and attorneys’ fees.  Wells Fargo also must post a notice informing employees of their whistleblower protections under the Sarbanes-Oxley and Consumer Financial Protection acts.

“No banking industry employee should fear retaliation for raising concerns about fraud and practices that violate consumer financial protections,” said Barbara Goto, OSHA regional administrator in San Francisco. “The U.S. Department of Labor will fully and fairly enforce the whistleblower protection laws under its jurisdiction.”