$22 Million fine levied against Wells Fargo for purported whistleblower retaliation.
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On September 1, 2022, Wells Fargo was hit with a sizable fine by the Occupational Health and Safety Administration ("OSHA") for violating the Sarbanes-Oxley Act ("SOX"). It was discovered that the business had illegally retaliated against an employee who had come forward with information about the bank's questionable activities. Wells Fargo was ordered by the government to pay the whistleblower about $22 million in damages, which includes compensatory damages, lost bonuses and benefits, interest, and back pay in addition to front pay.
After determining that Wells Fargo had retaliated against the Wells Fargo whistle blower who had accused the corporation of financial malfeasance, the Labor Department ordered the company to pay the hefty sum. OSHA determined that Wells Fargo had breached whistleblower protection laws by "improperly terminating" the senior manager, according to a news release.
The manager, who was based in the Chicago area and worked for Wells Fargo in commercial banking, was let go after repeatedly expressing concerns about what they perceived to be financial law violations, including claims of price fixing, wire fraud, and receiving orders to fabricate customer information, according to the Labor Department.
The bank was ordered by OSHA to pay the Chicago-based Wells Fargo whistleblower a variety of damages, including back wages, interest, missed bonuses and benefits, and compensatory damages.
According to a bank spokeswoman, the bank's employees are encouraged to report concerns, and Wells Fargo conducts prompt and thorough investigations. The bank fired the manager illegally in 2019, according to OSHA, after the unnamed employee reported being told to falsify customer information and raised concerns to managers and a corporate ethics line about price-fixing and interest-rate collusion.
At first, the bank did not explain the termination but later claimed it was a part of a restructuring process. However, investigators later concluded that the firing wasn't consistent with the dismissals of other managers who were also laid off during that said restructuring.
By the Sarbanes-Oxley Act's whistleblower protection provisions, the employee complained to OSHA, alleging retaliation. The OSHA Whistleblower Protection Program protects workers from retaliation after they disclose violations of several laws, including those about money laundering, securities, tax, criminal antitrust, and safety and health at work. It also enforces the whistleblower requirements of Sarbanes-Oxley.
According to Jordan Thomas, a lawyer who assisted in the creation of the Securities and Exchange Commission's whistleblower program and is currently employed by the law firm SEC Whistleblower Advocates PLLC, the penalties were especially high for OSHA.
Wells Fargo, headquartered in San Francisco, has faced more regulatory actions in recent years. Its long-running false account issue led to a $3 billion settlement with the Justice Department and the SEC in 2020.
Regulators penalized Wells Fargo $250 million in September 2021 for failing to make headway in resolving persistent problems in its mortgage division. Additionally, the bank settled with the SEC in May for $7 million, allegedly due to bugs in a new anti-money laundering system that allowed questionable transactions to initially go unnoticed.
American multinational financial services firm Wells Fargo & Company is well-known throughout the world. With operations in 35 nations, the corporation provides services to more than 70 million clients globally. Along with JPMorgan Chase, Bank of America, and Citigroup, it is regarded as one of the "Big Four Banks" in the United States and a systemically important financial institution according to the Financial Stability Board.
Disclosure: Some of the links in this article may be affiliate links, which can provide compensation to me at no cost to you if you decide to purchase. This site is not intended to provide financial advice and is for entertainment only.