Wells Fargo & Co. (NYSE:WFC) has been ordered to reinstate a former bank manager fired after reporting suspected illegal behavior. The bank was also ordered to provide the whistle-blower with about $5.4 million in back pay, compensatory damages and legal fees. The employee reportedly worked for the private bank division of Wells Fargo’s wealth-management unit.
The reported incidents of suspected bank, mail and wire fraud were performed by two bankers in the Los Angeles area. The manager reported the behavior to his superiors and on a company hotline. After reporting the activities of the two bankers, he was told he had 90 days to find a new job at Wells Fargo. He was fired after his search was unsuccessful.
The Occupational Safety and Health Administration determined his warnings were at least a contributing factor in the termination. The whistle-blower had received positive job performance reviews before he was dismissed in 2010. He has been unable to find work in the banking industry since. OSHA is responsible for enforcing whistle-blower protection laws.
In September, a scandal erupted when Wells Fargo employees were found to have met aggressive sales targets by opening as many as two million unauthorized bank and credit card accounts for customers over nearly half a decade. The bank fired at least 5,300 employees who were involved and paid $185 million to settle lawsuits brought by two federal regulators and the Los Angeles city attorney. Some executives lost their bonuses and some senior managers in the consumer business were fired.
The scandal triggered investigations and congressional hearings. John G. Stumpf resigned as chief executive of Wells Fargo in October after testifying before Congress in September. His successor, Timothy J. Sloan, acknowledged in January that the bank may have retaliated against some of its former employees.
Numerous former Wells Fargo employees have said that they were penalized or fired after trying to report the issues to the company’s ethics hotline, their bosses, or directly to CEO Stumpf. The bank appeared to have been receiving internal warnings about the problem for years. It is not clear if the suspected fraud that the manager was trying to report was part of that scandal. The firing occurred during the time the misconduct was known to have taken place.