What’s in your wallet? The Man From FCPA thought about that ubiquitous bank card commercial when reading a recent article in the New York Times that Wells Fargo is now under scrutiny for its termination of certain whistleblower employees in their ongoing fraud scandal. It turns out that federal regulations require that anytime a “broker or certain other registered representatives leave a bank—voluntarily or otherwise—the company is required to file a notice with the Financial Industry Regulatory Authority” (FINRA). The form is a U5 and it “includes a field where the bank must disclose any allegations that played a role in the employee’s departure.” In the financial services industry, a negative mark by an employer on this form can blackball a person’s entire career.
U.S. Senators have asked why this information was not filled in by Wells Fargo for those employees who were terminated and subject to this FINRA regulation. If the bank had done so, it might have given FINRA insight into the problem earlier. Conversely, Senator Elizabeth Warren and others have asked “if Wells Fargo used unfavorable U5 filings as a weapon against who tried to draw attention to the bank’s deeds misdeeds.”
