Minami Tamaki Investigating Wells Fargo Employee Rights Violations and Inaccurate Form U5 Disclosures in Wake of “Cross-Selling” Scandal

Minami Tamaki LLPOn September 8, 2016, the U.S. Consumer Financial Protection Bureau (“CFPB”) fined San Francisco-based Wells Fargo more than $185 million for its widespread practice of opening unauthorized deposit and credit card accounts.  According to CFPB, Wells Fargo opened as many as two million such accounts without customer notice or permission.

Minami Tamaki is investigating the employment practices of Wells Fargo related to its “cross-selling” scheme.  Our Consumer and Employee Rights Group (CERG) attorneys represent individuals in the financial industry in employment matters, including wrongful termination, defamation, and regulatory reporting matters.

Former Wells Fargo employees have come forward to allege that disputes over Wells Fargo’s “cross-selling” practices led to inaccurate information being included on their Uniform Termination Notice for Securities Industries Registration (Form U5), which has caused harm to their future job prospects.  Wells Fargo is one of the largest employers in San Francisco, with approximately 15,000 employees in the Bay Area.

After news of the Wells Fargo scandal became public, CEO John Stumpf testified on Capitol Hill that upper level bank management was not responsible for the unauthorized opening of accounts.  Stumpf, who soon after stepped down as CEO, said that “cross-selling” was carried out by mostly low-level employees, and that Wells Fargo had conducted internal investigations of these practices and terminated a total of over 5,000 workers.

While Wells Fargo publicly pointed the finger at rank-and-file employees, numerous sources have reported that upper-level management set aggressive sales goals and gave directives to employees to carry out illegal “cross-selling.”  Former Wells Fargo employees say that the bank retaliated against them for complaining about, or refusing to carry out, these sales directives.  Employees allege that they were terminated or pushed to resign from Wells Fargo after lodging these complaints.  Such situations can raise legal concerns, as state and federal laws prohibit retaliation against employees who “blow the whistle” on an employer’s illegal conduct or who refuse to participate in illegal conduct.

The securities industry is specialized, with its own regulatory reporting requirements. Firms must report the “Reason for Termination” on the Form U5 of registered representatives, financial advisors, securities brokers, or investment advisors when they are separated from employment.  The information reported on the Form U5 is filed with the Central Registration Depository (“CRD”) and prospective employers, as well as the general public, can obtain the information.

Former employees have reported that Wells Fargo has stated on their Form U5 that they were terminated for reasons related to the illegal “cross-selling” practices.  In some cases, the Form U5 may state that the employee was terminated for failing to carry out job duties, while in others the Form U5 may state that the employee opened an account without proper authorization.  In either scenario, the Form U5 contains a record of unsatisfactory performance and/or improper behavior when in fact Wells Fargo pressured employees to carry out the long-running illegal “cross-selling” policy.

A false or misleading Form U5 can negatively affect an employee’s reputation, relationship with clients, and ability to obtain future employment in the banking industry.  Employees in the securities industry may file claims seeking amendment or removal of inaccurate information on their Form U5.  These claims are typically adjudicated through arbitrations administered by the Financial Industry Regulatory Authority (FINRA).  Employees may also file claims for defamation if information on their Form U5 is false or misleading.

If you worked for Wells Fargo and wish to discuss your employment status or Form U5, you may contact us at (415) 788-9000 or through our online form.