Wells Fargo must pay more than $22 million to a former senior banking executive who alleged they were retaliated against for blowing the whistle on financial misconduct.
The Occupational Safety and Health Administration (OSHA), a division of the U.S. Department of Labor, said the payout to the unnamed senior manager in the company’s Chicago-based commercial banking segment represented “back wages, interest, lost bonuses and benefits, front pay, and compensatory damages,” according to a press release Thursday. The manager was fired by Wells Fargo in 2019 and subsequently filed a complaint with OSHA.
After an investigation, OSHA determined the manager was a covered whistleblower under provisions of the Sarbanes-Oxley Act, and that his or her termination represented illegal retaliation against a whistleblower by Wells Fargo.
In a statement, Wells Fargo said it disagreed with OSHA’s findings, noting they were not based on an evidentiary hearing. The bank will file an appeal with an administrative law judge, a spokesperson said.
“Wells Fargo has zero tolerance for acts of retaliation, and employees are encouraged to report concerns, which will be promptly and thoroughly investigated,” the spokesperson said in an emailed statement.
According to OSHA, while still employed at Wells Fargo, the senior manager voiced concerns to bank area managers and to the bank’s ethics hotline regarding financial misconduct, including wire fraud.
“The manager expressed concerns that they were directed to falsify customer information and alleged that management was engaged in price fixing and interest rate collusion through exclusive dealing,” OSHA said.
Wells Fargo claimed its decision to fire the manager was part of a restructuring process, OSHA said. But the agency determined in its investigation the removal was not consistent with the bank’s treatment of other managers removed under the initiative.
“The evidence demonstrates Wells Fargo took retaliatory action against this senior manager for repeatedly expressing concerns about financial management they believed violated federal laws,” said Doug Parker, assistant secretary of labor for occupational safety and health, in the press release. “The Sarbanes-Oxley Act protects employees from retaliation in these very circumstances, and the Department of Labor will not tolerate employers who violate the law and illegally terminate workers that exercise their rights under the law.”
Wells Fargo has paid settlements in other recent cases where internal whistleblowers brought wrongdoing to light.
In September 2021, the bank paid $72.6 million to the Department of Justice (DOJ) to resolve allegations it fraudulently overcharged hundreds of commercial customers who used its foreign exchange services. In that case, a whistleblower filed a complaint with the DOJ under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
In 2017, Wells Fargo was ordered to pay $577,500 in back wages, damages, and other fees to a former branch manager who blew the whistle on alleged illegal activities by some of her subordinates. That case was connected to the fake accounts scandal that would eventually cost Wells Fargo $3 billion in criminal and civil fines and led to personal penalties levied by the Office of the Comptroller of the Currency against multiple top Wells Fargo executives, including a $17.5 million fine against former Chief Executive John Stumpf.