CNN Money has found multiple whistleblowers from Wells Fargo who were willing to go on the record and report that they were fired in retaliation for coming forward to report the massive fraud in which Wells Fargo employees opened up 2,000,000 fake accounts in their customers' names, raiding their real accounts to open them, then racking up fees and penalties, and trashing their customers' credit ratings.
CNN also spoke to a former Wells Fargo HR manager who explained how the retaliatory firings worked: employees who blew the whistle would be monitored closely for minor infractions (e.g. being two minutes late for work), then fired "with cause."
The Sarbanes-Oxley Act, passed in the wake of the Enron fraud, makes it a jailable, criminal offense to fire whistleblowers; it also makes the CEO and CFO personally, criminally liable for failures to create secure means by which whistleblowers can come forward without fear of retaliation.
Wells Fargo CEO John Stumpf has repeatedly claimed to be taking "personal responsibility" for the fraud, but exec (who is also Chairman of Wells Fargo's board) hasn't given back any of the millions of dollars in bonuses he was paid as a direct result of the fraud; has not resigned; has not even used Wells Fargo's internal procedures to claw back part of the $125M bonus the company paid to the executive who oversaw the fraud and then "retired" a few weeks before the scandal broke, but five years after whistleblowers alerted the bank to the fraud's existence.
With these smoking guns — illegally fired whistleblowers — and given the election season's appetite to make examples of high-profile teflon dons like Stumpf, there is a significantly higher chance of criminal prosecutions today than there was yesterday.
This development confirms that Wells Fargo is rotten to its core and John Stumpf needs to be prosecuted. However, even though I indicated that he was unlikely to survive ten more days based on his abject performance at the Senate Banking Committee on Tuesday, before the CNN story broke, he may have his sell-by date extended by virtue of being summoned to appear before the House Financial Services Committee next week, on September 29. I doubt the board would oust Stumpf before then. It would be dangerous to cut him loose; Congress could still call him (although he would probably refuse to appear) and having an interim CEO stumble and mumble his way through the hearings would not look good. And even if the board has already decided to move against Stumpf, they’d likely want him to believe he has their support so that he is motivated to do the best job he can next week.The CNN story is certain to lead more wronged former employees to speak up to the media, regulators, Congressmen, and prosecutors. That means Stumpf and his fellow Wells Fargo execs are in even hotter water than before. Couldn’t happen to a more deserving bunch.
I called the Wells Fargo ethics line and was fired
[Matt Egan/CNN Money]
Wells Fargo Fake Accounts Hidden by Fake Whistleblowing: Former Employees, Including HR Officials, Allege Systematic Retaliation
[Yves Smith/Naked Capitalism]
