Amid growing allegations that it retaliated against employees who complained about unethical sales practices, Wells Fargo is mounting an investigation of its own.
"We are looking into any and all allegations of retaliation, and we will take appropriate actions based on what we find," Wells Fargo CEO Tim Sloan told employees at a town hall meeting in Des Moines, Iowa, on Thursday.
Sloan conceded that while the majority of cases have so far been found to have been handled appropriately, there were some instances in which there were questions. "We are doing further investigation of those matters. If we find complaints were mishandled, then we will take action to make it right," Sloan said.
The internal investigation follows a class-action lawsuit filed in California by former employees who allege they were either demoted, retaliated against or terminated for failing to engage in what they viewed as unlawful sales practices. The lawsuit, which seeks $7.2 billion in damages, also charges that the bank violated whistleblower protection provisions of the Dodd-Frank Act.
A least one other lawsuit brought by former employees has also been filed against the bank.
The bank has been in full damage-control mode ever since it was revealed that retail bankers and other employees had opened 2.1 million fake bank and credit card accounts in an effort to meet aggressive cross-selling quotas. Of the 5,300 workers fired for opening unauthorized accounts, more than 600 were registered at various times with Wells Fargo Advisors as registered reps, according to FINRA data.
In addition to the internal investigation, Wells Fargo has also conducted an "end-to-end review" of its "EthicsLine," a number employees can call to report ethical lapses. Sloan said that the bank had made changes to the review process and that the changes are being validated by an internal audit team.
"We've heard very concerning reports that there have been cases where the EthicsLine did not serve as the safe haven it is intended to be, and also heard allegations that some team members experienced retaliation after having contacted the EthicsLine," Sloan said.
Sloan noted during an earnings call with analysts last month that the bank was looking into opportunities to rehire former employees who left the retail bank due to sales performance issues.
Ever since it reached a $185 million settlement with regulators, the bank has been besieged by formal and informal investigations launched by federal, state and local government agencies, including the Department of Justice, the SEC and state attorneys general and prosecutors' offices, as well as Congressional committees. In addition, a number of lawsuits have been filed by non-governmental parties seeking damages related to their sales practices, according to a Wells Fargo quarterly filing with the SEC.
As part of its effort to quell public outrage over the scandal, Wells Fargo top executives have fanned out throughout the country to address disheartened employees. John Shrewsberry, the bank's CFO, for example, met with employees in Phoenix on Wednesday and Perry Pelos, the head of Commercial Banking, will be meeting with employees in Seattle next week.
"Retaliation is unacceptable," Sloan said during Thursday's town hall. "It's against our policy, and it is unacceptable to me personally. It will not be tolerated at Wells Fargo."
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