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Practice Management > Building Your Business

Wells Fargo Must Rehire Fake-Accounts Whistleblower, Pay $577K

By Janet Levaux

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The Department of Labor has ordered Wells Fargo to reinstate a branch manager who was fired after raising concerns about the opening of bank accounts without clients’ knowledge or consent.

On Friday, DOL also said it must pay the Califormia woman, Claudia Ponce de Leon, $577,500 in back wages and other compensation. She was fired in September 2011. The bank has since admitted that its employees opened up to 2 million accounts without first obtaining customers’ permission.

That same day, a former Wells Fargo advisor and his attorney received private information about an estimated 50,000 clients and an undisclosed number of its registered representatives.

To resolve the fake-accounts scandal, Wells Fargo paid $185 million to federal and local authorities. It also agreed to pay $142 million to settle a class-action settlement.

In April, Wells Fargo was ordered to reinstate a wealth manager in Los Angeles and pay him $5.4 million in back wages; his name was not disclosed.

“The Department of Labor made the right decision to hold Wells Fargo accountable for retaliating against this courageous branch manager, and I’m glad that the Department continues to investigate the labor violations at Wells Fargo,” said Sen. Elizabeth Warren, in a statement.

In its latest quarterly report, Wells Fargo said the advisor headcount in its Wealth and Investment Management Group dropped 1% (by roughly 145) to hit 14,527 on June 30. That figure is down 3% (or by about 436 advisors) from a year ago.

The bank’s total revenue in the second quarter of 2017 was flat at $22.2 billion from the prior. Net income rose 5% to $5.8 billion, or $1.07 per share, for the year-ago period. 

“We continued to make progress this quarter in our efforts to rebuild trust and build a better Wells Fargo and, while there is still more work ahead of us, we are on the right track and I am confident about our future,” said CEO Tim Sloan in a press release.

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