If you are a Wells Fargo employee, U.S. laws can provide protection and rewards for reporting potential fraud, financial misconduct, anti-money laundering violations, or foreign bribery.
If you have concerns, our recommendation is to remain silent and avoid internal hotlines, as reporting within the company can lead to retaliation. It is known from past whistleblowing cases at Wells Fargo that internal compliance programs are typically established to safeguard the bank’s interests rather than those of its employees.
Read on to discover the various types of fraud or misconduct that Wells Fargo has engaged in throughout the years, as well as the procedures for disclosing your concerns to the right source.
A History of Violations at Wells Fargo
Headquartered in San Francisco, Wells Fargo is a publicly traded company that has engaged in repeated financial crimes including violations of the Bank Secrecy Act (BSA), Foreign Corrupt Practices Act (FCPA), Securities Exchange Act, and the Commodities Exchange Act, among others.
If you have knowledge of such wrongdoing, you may want to consider blowing the whistle. Keep in mind that your disclosure is very important, and can shield investors and financial markets from major losses. Below is a list of the types of frauds the bank has been engaged in over the years:
Commodities Fraud
- Foreign Exchange Market Manipulation: Wells Fargo traders were accused of issuing arbitrary price rates that failed to account for actual trades in the foreign currency market.
- Recordkeeping and Supervision Violation: Bank employees, including senior executives, engaged in off-channel communications on business related matters on platforms inaccessible to CFTC oversight.
Securities Fraud
- Misrepresenting Investments: During the 2008 Mortgage Crisis, Wells Fargo was investigated for selling securitized loans that failed to meet their own due diligence standards.
- Misleading Investors: CFTC discovered that the bank inflated key metrics and performance indicators on several occasions, harming investors.
- Overcharging Investors: Wells Fargo had agreed on reduced advisory fees for 10,900 accounts but failed to implement adjusted rates, leading to overbilling between 2014 to 2022.
- Insider Trading: Employees of Wells Fargo perpetrated an alleged scheme, buying or short selling a stock based on research analyst reports not yet published.
Anti-Money Laundering (AML) Violations
- Inadequate customer due diligence: Wells Fargo failed to administer proper Know Your Customer (KYC) guidelines for over 200,000 new accounts over 9 years that may be linked to money laundering or illegal activity.
- Failing to adequately monitor accounts for suspicious activity: Wells Fargo to report high or moderate risk transactions for money laundering, terrorist financing, or other illegal money movement in a timely manner.
Notable Wells Fargo Fraud Cases
Below are a few recent cases involving Wells Fargo’s financial disruption along with the substantial penalties:
Cross-Selling Scandal (2024)
From 2012-2016, Wells Fargo misled investors about the success of its largest business unit’s strategy: Community bank. As a result, under the Sarbanes-Oxley Act of 2002, the SEC ordered Wells Fargo to pay $500 million in penalties due to widespread unethical and unlawful sales practices misconduct including (1) failure to make necessary disclosures regarding selling (2) misrepresenting cross-selling metrics with significant numbers of unused or unauthorized accounts. Cross-selling involves selling multiple products and services to a single consumer. But due to aggressive targets set by the company, employees would make purchases on behalf of consumers without their knowledge. The scandal was a major breach of trust of account-holders and confidence in their figures for future investment.
Communication Recordkeeping Breech (2023)
Four financial institutions including Wells Fargo were sanctioned by the CFTC for violating recordkeeping and supervision requirements of unapproved communications methods. Wells Fargo was slapped $75 million in fines for communicating business matters on messaging platforms such as personal text or WhatsApp. If requested, the CFTC would generally not be able to access such evidence because they are unlikely to be maintained or preserved by the firm.
Anti-Money Laundering Suspicious Activity Oversight Failure (2022)
Wells Fargo Advisors, a broker-dealer subsidiary of Wells Fargo, agreed to pay $7 million for settlement of Anti-Money Laundering related violations under Section 17(a) of the Securities Exchange Act and Rule 17a-8. The SEC concluded that the firm’s 2019 internal Anti-Money Laundering monitoring and alert system was deficient. The system failed to process different country codes for foreign wire transfers and therefore failed to timely file 25 Suspicious Activity Reports (SARs) from foreign countries of high or moderate risk for money laundering, terrorist financing, or other illegal money movements. Nine additional SARs were not timely filed due to a failure to process wire transfers through the AML transaction monitoring system.
Risks of Reporting Internally at Wells Fargo
Although reporting internally might appear to be the safe choice, Wells Fargo may retaliate for you doing the right thing. Wells Fargo advises whistleblowers to raise concerns internally through their ethics hotline, but as many other big companies, these communication avenues are typically created to safeguard the bank’s interests rather than those of the whistleblower. Whistleblowing within the company is often either neglected or retaliated against. Over our 35 years of protecting whistleblowers, we have witnessed this happening.
Many people also believe that their whistleblowing efforts to the US government whistleblower programs won’t matter or worse be used against them. This is in fact quite the opposite, as the United States offers strong protections for whistleblowers, such as the option to report anonymously and receive significant rewards.
If you are considering reporting issues, we recommend taking advantage of these U.S. laws outlined below.
Whistleblower Award Programs for Wells Fargo Employees
Wells Fargo illicit actions have resulted in notable financial damages for investors. Considering the bank’s track record and the nature of white-collar crime being difficult to detect, it is likely that the bank will continue committing fraud under the radar.
This is why whistleblowers play a crucial role in upholding the integrity of financial markets, preventing breaches and exposing wrongdoing. Below, we outline several laws that protect your identity, allowing you to file anonymously, and credit you with financial rewards for reporting.
SEC Whistleblower Program
Awards up to 30% of sanctions in the case of a successful investigation.
CFTC Whistleblower Program
In line with the SEC program, awards up to 30% of monetary sanctions for commodities futures trading violations.
Foreign Corrupt Practices Act (FCPA) Whistleblower Program
Also up to 30% awards, reporting on foreign bribery or foreign political official corruption.
Anti-Money Laundering (AML) Award Program
Up to 30% award for exposing money laundering and sanction violation schemes.
Blowing the Whistle on Wells Fargo to Regulators
Reporting against a ‘Too Big to Fail’ bank like Wells Fargo can be intimidating. That is why it is important to seek counsel from an attorney that understands the whistleblower procedure and offers support throughout. A specialized whistleblower attorney can offer:
- Protection: Defending your legal rights and mitigating retaliation.
- Maximum Award: Securing the greatest possible award through accurate and timely filings.
- Expert Guidance: Leading you through the complicated legal landscape.
- Confidentiality: Protecting your identity and information by communicating through secure outlets.
- Anonymity: Guarding you from the government or your employer by filing anonymously through an attorney.
- Negotiation: Obtaining the highest award amount.
- Contingency Fee: No upfront costs, pay only if you receive an award.
Hiring a whistleblower attorney significantly increases the chance that your information will open an investigation and reward you for your disclosure while avoiding the legal and financial trouble that comes with retaliation.
Seeking Assistance? Hire Us.
We have a proven track record in banking whistleblower cases. Our firm has a history of representing clients in some of the largest banking scandals in recent history.
We represent money laundering whistleblower Howard Wilkinson, who exposed a $230 billion money laundering scheme at Danske Bank. Also, UBS whistlblower Bradley Birkenfeld, who uncovered a massive tax evasion scheme at UBS involving over 4,450 U.S. taxpayers. His whistleblowing led to a $104 million award from the IRS.
If you’re considering reporting a violation at a financial institution, our team of experienced whistleblower attorneys can provide the guidance and support you need. We offer free, confidential case evaluations and work on a contingency fee basis, meaning you pay nothing unless we win your case. Contact us today to discuss your situation.
