Close Close

Regulation and Compliance > Federal Regulation > FINRA

Reps Fired by Wells Fargo Asked to Call FINRA

Your article was successfully shared with the contacts you provided.

The Financial Industry Regulatory Authority is asking former employees with Wells Fargo to contact the organization if they have questions about why they were fired—including cross-selling of products and services.

This news comes about one month after FINRA said it planned to look into regulatory filings tied to at least 207 former employees of Wells Fargo who were registered to sell securities and were dismissed for issues connected with its fraudulent accounts scandal, which reportedly affected up to 2 million client accounts.

“Recent news reports have highlighted several former Wells Fargo bank employees who believe that they were terminated from the bank for reporting or refusing to engage in allegedly fraudulent account-opening activities,” FINRA explained in a press release on Friday.

“Further, the reports indicate that a subset of these individuals who were also registered with FINRA to conduct securities activities have raised concerns that they did not receive a copy of their Form U5 termination notice within 30 days of being terminated as required … or that their Form U5 contained inaccurate or incomplete comments related to the reason for the termination,” it said.

The regulatory body wants to “review the facts and circumstances surrounding these allegations.”

Former registered Wells Fargo staff members can use a dedicated phone line (800-334-0668) and email address ([email protected]) to report possible “material issues associated with the processing of their Form U5, including the accuracy and completeness of the language filed by Wells Fargo Advisors describing the reason for termination,” according to a statement.

For its part, the bank said: “If any former team member has concerns with their termination or a U5 filing then we want to hear from them.”

“We work to make sure those forms are accurate and fair, and in all cases a former employee can make comments on their U5 or request that we review the language,” it explained in a statement shared with ThinkAdvisor on Friday.

Earlier Issues

In November, FINRA said that it “takes seriously the integrity and accuracy of all filings made by firms, including Form U-5s. With respect to Wells Fargo, we are reviewing the accuracy of filings made by the firm with regard to individuals involved in the cross-selling activities that are the subject of the CFPB action.

“We are also reviewing cross-selling activities across the industry as reflected in a sweep letter which is posted on our website,” it explained.

This came after Sens. Elizabeth Warren, Ron Wyden and Bob Menendez asked Wells Fargo about its response to unauthorized accounts and its FINRA disclosures of details related to fake accounts; they gave the bank until Dec. 5 to reply. At the time, Wells Fargo had disclosed that some 5,300 employees were fired over their involvement in the scandal.

The apparent incomplete nature of the bank’s U-5 filings may have deprived regulators of details that might have helped them uncover and stop the “illegal activity” sooner, the senators argued.

In their letter, the senators say the bank filed close to 18,000 U-5 forms from 2011 to 2015 and that close to 20% — about 3,355 out of roughly 17,750 – were for employees listed as “discharged,” “permitted to resign” or “other” (which includes “failure to perform job duties”).

The senators explain that FINRA told them “slightly more than 600 of those 5,300 [fired] persons were registered at various times with [Wells Fargo Advisors …] between 2011 and early 2016, and … 207 of them were specifically terminated for issues that fall within the scope of the [$185 million Consumer Financial Protection Bureau] order.”

They also point out that of the remaining 400 FINRA-registered employees fired by Wells Fargo, it “is not clear if the bank filed U-5s at all.” FINRA staff told the senators that its review of the matter is “in its early stages” as it awaits further information from the bank.  

In their six-page letter to President & CEO Tim Sloan, the senators note that information recently obtained from FINRA “confirm that Wells Fargo had ample information about the scope of fraudulent sales practices occurring at the bank long before the CFPB settlement, and they raise additional questions about Wells Fargo’s response to this illegal activity.”

(Wells Fargo is set to pay $185 million to resolve the issue with the Consumer Financial Protection Bureau.)

The ongoing attention on Wells Fargo “has most recently focused in part on licensed bankers that work in retail bank branches. Licensed bankers meet with bank customers and help identify their financial needs. These licensed bankers are employed by Wells Fargo’s retail bank and are required by FINRA to be licensed in order to carry out and be compensated for their activities. As such, Wells Fargo is required to notify FINRA when these team members are terminated or voluntarily leave Wells Fargo,” the bank stated.

In other news, Wells Fargo said in November that its possible litigation losses could reach up to $1.7 billion vs. its earlier estimate of $1 billion. It also has added the Securities and Exchange Commission to a list of agencies investigating its sales practices disclosures, according to regulatory filings.



© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.