Wells Fargo broadened the scope of a scandal as it fired hundreds of brokerage workers for improper sales practices, three US senators said on Thursday. The fourth-biggest US bank has so far defined the controversy as a retail banking problem.
Senators Elizabeth Warren, Robert Menendez and Ron Wyden, in a letter to Wells Fargo Chief Executive Tim Sloan, questioned the bank’s revelations about those employee’s terminations in mandatory regulatory filings.
The letter is the first sign that clients of the brokerage business ‘Wells Fargo Advisors’, may have also been affected.
Wells Fargo would pay $5 million to customers and $185 million in penalties. This is for opening up to 2 million credit card and deposit accounts in customers’ names without their knowledge.
The San Francisco-based bank said it dismissed 5,300 employees for inappropriate sales practices over a period of five years.
In October, Reuters reported that thousands of small business customers have also been affected.
“It would appear that Wells Fargo concealed key information from regulators that may have revealed the bank’s misdeeds long before the September 2016 settlement,” the senators wrote, requesting more information.
FINRA on the Case
The Financial Industry Regulatory Authority (FINRA) informed congressional staff that it had received dismissal documents, or Form U5s, for at least 600 of those fired Wells Fargo employees. But only 207 of them have information indicating they were fired for practices that led to fake accounts.
FINRA is a non-government organization that regulates member brokerage firms and securities dealers.
The senators said that the incomplete U5 filings may have held back information from regulators that could have helped them to discover and stop the illegal activity sooner.
Spokeswoman Nancy Condon said that FINRA takes seriously the accuracy and integrity of all filings made by firms.
She disclosed that FINRA last week started a review of sales programs for all firms it administers.
Several investigations, including an internal review, were ongoing, Wells Fargo spokeswoman Jennifer Greeson Dunn said. She added that that the bank has been working for years to halt wrongful sales practices. She will be taking steps to mend the damage.
Sloan said at a conference on Thursday that he had not aware of issues outside the retail bank.
Wells Fargo’s retail branches include workers from other businesses who offer products other than bank accounts.
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