Wells Fargo Fake Accounts Hidden by Fake Whistleblowing: Former Employees, Including HR Officials, Allege Systematic Retaliation

CNN has just found a smoking gun that should enable prosecutors to bring charges against Wells Fargo CEO John Stumpf.

We were skeptical early on about the bank’s pious claims that it had fired 5,300 employees for creating phony accounts from 2011 to 2015. Since it took outside intervention for the bank to stop misconduct that had gone on for years and was central to the bank’s strategy, it was pretty certain that until recently, any refusniks would be fired. And that meant Wells Fargo would be highly motivated to bolster its “See, we were trying to do the right thing but it was harder to do than we thought” story by inflating the number of people it said it fired in connection with the fraud by including ones fired for bucking their bosses and refusing to participate.

Mind you, the CNN story didn’t establish that Wells Fargo had larded up the numbers by including internal dissenters it fired. But what it has found is far worse: the bank terminated employees who made use of formal whistleblower procedures to object to account fakery and other abuses, like forging signatures.

Not only does the story have multiple sources, most of whom let their names be published, but it also includes a source from Wells Fargo who confirms that the “can the whistleblowers” process was institutionalized. For instance, the Human Resources department gave the business units tips as to how to created trumped-up charges so as to cover for the real reason for the firings. Per CNN:

Now CNNMoney is hearing from former Wells Fargo (WFC) workers around the country who tried to put a stop to these illegal tactics. Almost half a dozen workers who spoke with us say they paid dearly for trying to do the right thing: they were fired…

[Bill] Bado not only refused orders to open phony bank and credit accounts. The New Jersey man called an ethics hotline and sent an email to human resources in September 2013, flagging unethical sales activities he was being instructed to do.

Eight days after that email, a copy of which CNNMoney obtained, Bado was terminated. The stated reason? Tardiness….

One former Wells Fargo human resources official even said the bank had a method in place to retaliate against tipsters. He said that Wells Fargo would find ways to fire employees “in retaliation for shining light” on sales issues. It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions.

“If this person was supposed to be at the branch at 8:30 a.m. and they showed up at 8:32 a.m, they would fire them,” the former human resources official told CNNMoney, on the condition he remain anonymous out of fear for his career.

CNNMoney spoke to a total of four ex-Wells Fargo workers, including Bado, who believe they were fired because they tipped off the bank about unethical sales practices.

Another six former Wells Fargo employees told CNNMoney they witnessed similar behavior at Wells Fargo — even though the company has a policy in place that is supposed to prevent retaliation against whistleblowers. CNNMoney has taken steps to confirm that the workers who spoke anonymously did work at Wells Fargo and in some cases interviewed colleagues who corroborated their reports.

The fact that a former HR staffer confirmed that the bank set out to fire whistleblowers is deadly. It means that the internal ethics line and other channels that John Stumpf piously cited to claim that nothing was wrong with Wells Fargo’s culture were in fact cynical shams designed to get rid of troublemakers who’d question shoddy practices. The fact that Bado was canned a mere eight days after sending an e-mail to human resources also supports the charge of the anonymous HR source that Wells Fargo had established procedures for firing whistleblowers. There is no way any serious investigation would take place in only eight days.

Punishing whistleblowers, particularly on a systematic basis, is flagrant misconduct. This implicates a large number of executives, including the general counsel, the head of HR, and potentially outside counsel and board members, as well as Stumpf and Wells Fargo’s president and COO, Timothy Sloan. How could anyone have signed off on this arrangement?

Just one example of how punishing whistleblowers is against the law: after the Enron bankruptcy, the Sarbanes Oxley Act was designed to prevent the “I’m the CEO and I know nothing” defense by requiring at a minimum that the CEO and CFO personally certify the accuracy of financial reports and the adequacy of internal controls. It also required public companies to create secure channels for internal whistleblowers to report if they saw what looked like legal or regulatory violations. From the National Whistleblower Center:

Unlike most whistleblower laws, the SOX’s whistleblower protection provisions are not limited to providing a legal remedy for wrongfully discharged employees. In addition to containing employment-based protections for employee whistleblowers, the law contains four other provisions directly relevant to whistleblower protection. First, the law requires that all publicly traded corporations create internal and independent “audit committees.” As part of the mandated audit committee function, publicly traded corporations must also establish procedures for employees to file internal whistleblower complaints, and procedures which would protect the confidentiality of employees who file allegations with the audit committee….

Fourth, Section 3(b) of the SOX contains an enforcement provision concerning every clause of the SOX. This section states that “a violation by any person of this Act [i.e. the SOX] . . . shall be treated for all purposes in the same manner as a violation of the Securities Exchange Act of 1934.” This section grants jurisdiction to the SEC to enforce every aspect of the SOX, including the various whistleblower-related provisions. It also provides for criminal penalties for any violation of the SOX, including the whistleblower-related provisions….

In addition to these four provisions, the law contains an employee protection provision which permits whistleblowers to file a complaint before the U.S. Department of Labor alleging unlawful retaliation

The CNN story pointed out that retaliating against whistleblowers is not kosher:

“It is clearly against the law for any company (or executives of such companies) to try to suppress whistleblowing,” Harvey Pitt, former chairman of the SEC, told CNNMoney in an email.

A number of statutes — including Sarbanes-Oxley and Dodd-Frank — “make this unambiguously clear,” Pitt said.

This development confirms that Wells Fargo is rotten to its core and John Stumpf needs to be prosecuted. However, even though I indicated that he was unlikely to survive ten more days based on his abject performance at the Senate Banking Committee on Tuesday, before the CNN story broke, he may have his sell-by date extended by virtue of being summoned to appear before the House Financial Services Committee next week, on September 29. I doubt the board would oust Stumpf before then. It would be dangerous to cut him loose; Congress could still call him (although he would probably refuse to appear) and having an interim CEO stumble and mumble his way through the hearings would not look good. And even if the board has already decided to move against Stumpf, they’d likely want him to believe he has their support so that he is motivated to do the best job he can next week.

The CNN story is certain to lead more wronged former employees to speak up to the media, regulators, Congressmen, and prosecutors. That means Stumpf and his fellow Wells Fargo execs are in even hotter water than before. Couldn’t happen to a more deserving bunch.

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  1. vlade

    What I’m interested in is how long it will it take for someone from some other bank to put up their hand and go “you know, it goes on here too..”. Maybe not on WF scale, but I’m pretty sure this is not uncommon (I know a few european banks that I’m pretty sure are as bad as WF in this, for exactly the same reasons).

    1. cnchal

      . . . “you know, it goes on here too..”

      Competitive pressure and Gresham’s dynamic means that is an absolute certainty.

    2. Denis Drew

      About 10 years ago I got a snail mail offer of $150 to open a Chase checking account around the corner, up the block (details are tentative, names out front keep changing).

      Part of the deal was your SS retirement must be deposited there. I didn’t want to do that — but I was not told it was mandatory — so the account was opened — and the SS Check was switched to Chase without my knowledge.

      Poor salesperson; presumably under much pressure. Doesn’t say much of corporate culture.

    3. mirjonray

      Vlade, I was wondering the same thing. WF can’t be the only rotten apples out there. I started to really hate going into bank branches in the mid-1990’s when my already large regional bank was swallowed up by an even larger one. Every time I walked into a branch I would first be accosted by people in polo shirts who hung around desks in the middle of the lobby and tried to get me to open new bank and credit card accounts, take out loans, etc. Then I would be harangued by tellers who told me I had too much money in my savings account and could I please step back and talk to one of their over-priced investment advisors.

      I’m old enough to remember when walking into a bank branch was a pleasant experience, and those boring bankers gave us good advice on how to best handle our money. Now when I walk into a bank I have to put on my sour old “no means no” face while being mindful of the fact that those pesky bankers are trying to rip me off every way they can.

      Sad to say, I’ve also had some unpleasant experiences in credit unions, where they’ve given me advice that seemed to steer me towards running up as many fees as possible.

    4. Elex

      I worked for Wells, Bofa and Chase and can tell you Wells was the only one pushing the “cross selling” or opening up account at all cost tactics. Bofa has to many customers they don’t need to and Chase has to many regulators on their butt they don’t allow it.

    1. Quanka

      The sub-heading of that article from the SacBee is great, “Here are the Senators who took money and now sit in Judgment” — its a perfect pairing to the check we saw last week with the Memo “because Scott Walker asked.”

      That giant sucking sound is not the manufacturing jobs going south, its the drain plug being pulled from Stumpf’s CEO sink. God only knows what dirt is sitting at the bottom of the muddy water.

  2. Clive

    Standard boilerplate Code of Conduct at Wells https://www.sec.gov/Archives/edgar/data/72971/000119312509240334/dex994.htm but, he says, laughingly if hollowly, this bit is a doozy in the light of the above feature (emphasis mine):

    All contact with EthicsLine will be treated as confidential to the extent permitted by law. No retaliation may be taken against a team member for providing information in good faith about possible Code violations or violations of laws, rules, or regulations by others.

    You may choose to use EthicsLine anonymously. Since the assigned investigator may need some additional information about the situation, you will be assigned a report number and asked to call EthicsLine back with that report number on a set date to answer any additional questions. If you’re contacted regarding your EthicsLine call or web report, or any other ethics-related issue, give the investigator any additional information that you have.

    Under some circumstances, federal regulations may require Wells Fargo to report activity that it suspects may violate certain criminal laws. These regulations also require Wells Fargo to report certain types of suspicious activity. This includes conduct or activity by customers or by team members relating to Wells Fargo.

    The question I then have is, did anyone at Wells Fargo actually report the fraudulent activity — again, the usual who-when-where and what happened questions are interesting — or did the CFPB have to drag it out of them?

    1. readerOfTeaLeaves

      Clive, you and Yves are my dream tag-team on this story.
      I’m amazed at how much it has developed even since a week ago.

      I’ll go with ‘CFPB had to drag it out of them’, but I’m only betting quarters on it.

      Minor quibble: ” the Human Resources department gave the business units tips as to how to created trumped-up charges so as to cover for the real reason for the firings. “ merits bolding in the post, IMVHO.

  3. Tom

    I got a kick out of the last sentence of the long quote from CNN:

    CNNMoney has taken steps to confirm that the workers who spoke anonymously did work at Wells Fargo and in some cases interviewed colleagues who corroborated their reports.

    Funny, I assumed that verifying sources’ identities and cross-checking their stories was such a basic part of the job that it doesn’t even merit a mention. The way they pat themselves on the back for it here makes me wonder about stories that don’t conclude with that claim.

    1. jash

      HA , nice try……..

      I “wonder” that any of the “workers” would speak up as it should be common knowledge that they will be “blacklisted” if at all possible.

      They better not need a job with bankers in this country if they are outted.

    2. Yves Smith Post author


      Did you miss that the article at the very top said that CNN had been contacted by former workers?

      Normally, when reporters deal with sources, they are:

      1. Stories that were planted, as in press releases, academic articles, think tank or conference output. As in from organizations. Over 50% of stories are like that.

      2 When looking for confirmation or quotes or the other side, reporters then go to KNOWN sources, who either help themselves or provide leads to other parties. So there is a provenance (and that’s before you get to the fact that the preferred sources for any story are People You Heard of or People from Organizations You Heard of or People from Organizations With Names That Suggest You Ought to Have Heard of Them). Again, no vetting needed.

      The fact that all these unknown parties showed up meant they needed to be vetted. After all, this could be a plot either by an evil hedgie to drive Wells’ stock down further for a day or two or a dirty trick by Wells to discredit the media.

    1. aloysius

      In his annual reports, Buffett always writes he wants his managers to report bad news immediately. Not so much here since they knew about it since 2011. Carol Loomis is really going to have to work extra hard to get lipstick on this pig.

      1. barefoot charley

        He’s also the trailer-court king of America. The poorer you are, the more profitable you’ll be, see your realtor for more information.

  4. Norb

    It is long past due that CEO’s and upper management should be prosecuted for this conduct. When left unchecked, similar acts spread throughout the entire social structure as individuals seize the opportunity to scam wherever they can.

    One has to hope that a tipping point on criminality has finally been reached. When the rotten edifice starts to fall, it is the perfect time to start building the new movements we always talk about.

    1. Katharine

      By all means! The failure to prosecute white-collar crime is unacceptable. While we’re at it, we should look into reviving the practice used in the 1890s of “killing” criminal corporations by rescinding their charters. It might not often be needed if executives were prosecuted, but it should be there when the harm done is grave enough. (I don’t know much about its history, but came across it in a footnote in Pollock and Maitland’s History of English Law, published in the 1890s.

      “The talk about ‘fictitious’ personality did not prevent the legists nor, with some exceptions, the canonists from holding that an universitas can commit a crime and be punished for it. On the contrary, they went great lengths in the punishment of corporations; some of them were prepared to say that if a civitas commits a capital crime, such as treason, aratro decapitetur. [It should be decapitated by the plow, which by my Latin dictionary suggests that the city would be not merely destroyed but ploughed up for arable land. I omit his references here.] In modern America the old doctrines which would deprive a corporation of corporate existence if it abused its power have borne new fruit, and joint-stock companies have learned the meaning of quo waranto [sic; Webster’s 2nd International spells it with two r’s].”

      What are we waiting for? (Oh, right. Government attorneys without ties to big business.)

      1. DJG

        Katherine: Thanks for the mention of rescinding their charters. We are way overdue for a revival. After the first one is lifted in an industry, other companies will fall into line.

      2. readerOfTeaLeaves

        While we’re at it, we should look into reviving the practice used in the 1890s of “killing” criminal corporations by rescinding their charters.


  5. Bottom Gun

    I can state from experience that the US government routinely retaliates against its own whistleblowers. Their designated advocate, the Office of Special Counsel, is too lazy and toothless to do anything about it.

    Given that, I’d advise Wells whistleblowers not to bother with the federal executive branch. Go straight to a member of Congress, the press, state agencies if the due diligence comes out well, or the court system. Would you hire a house cleaner with dirty dishes on his own table and cockroaches on his walls?

    1. DJG

      Yes. As we see in the current attempt to gain a pardon for Snowden. Manning, Kiriakou, and Drake are also not being pardoned. And there are plenty of others, whose names I can’t recall or whose stories have been buried.

  6. Normal

    Were the 5300 fired employees geographically diverse? If so then the fraud must have some form of central control.

    1. Yves Smith Post author

      They were but this does not prove that. You could have parallel figuring it out under pressure and rumor mill propagation. And it wasn’t one fraud, there were a bunch of different frauds that got to the same end.

  7. Dave

    I have banked with Wells/Wachovia/First Union/First PA for 40 years. Selected them initially because they were right across the street from work.
    This all makes me sick.
    How do I find a bank that is not similarly corrupt?

  8. Richard Davet

    The Board at a bank too big to fail………………

    Recall Audit Committee Chair at Enron, Robert K. Jaedicke, “nobody told me anything” excuse.
    Hence Sarbanes Oxley as a remedy.

    At this year’s annual shareholders meeting at Bank of America I demanded that my issues presented to the Board of Directors be taken up pursuant to SOX and the Audit Committee Chair Sharon Allen verbally consented to doing the review. To date I have received nothing from Ms. Allen as promised.

    The Board is deaf, dumb and blind by design. “Independent directors” are a euphemism for that definition.

  9. KPL

    As long as banksters do not go to jail and rule is law is not enforced nothing will change. These banksters will go their merry way, laughing all the way to the bank.

  10. Sluggeaux

    I’ll be shocked if any high-level executive at Wells is ever prosecuted for these blatant and systemic frauds by the revolving-door credentialist-dominated U.S. Department of Justice.

    It might happen, but I suspect that they’ll say that it’s “Too hard…

    1. Richard Davet

      Don’t worry FBI’s Comey now has his “intent” element for suggested prosecution. The cross selling business model was designed and operated by Stumpf et al.

    2. Jim Haygood

      I suspect that they’ll say that it’s “Too hard…“

      You’re psychic, Counselor Sluggeaux:

      On the front, right-hand corner of Warren Buffett’s desk sits a remnant of bygone days – a wooden inbox. But this inbox is different, because on the front of it are large red letters that spell out the words “TOO HARD.”


      You can even see his “TOO HARD” inbox in the photo!

  11. Divadab

    Stumpf had this look of amused condescension as Sen Warren was chewing him out – check out this sleek fatcat – he’s like the mafioso who knows the judge has been paid off and has to put up with some prosecutorial showboating.

    The most interesting thing to me is that all this fraud added nothing to the bottom line – it was purely for propaganda (investor pr and share price support) value. Sort of like the federal govt- it’s all about the story they tell the rubes, not anything substantial. And also like the federal govt, whistleblowers get gassed!

    1. flora

      “…this fraud added nothing to the bottom line…”

      It did add a great deal to the value of the stock options Stumpf owned. Get rid of unexpensed stock option pay for c-suites. Under the current executive payment system c-suites have a large, personal financial interest in manipulating stock prices by any means.

    2. Yves Smith Post author

      You apparently didn’t watch the hearing. Stumpf looked scared when he started his opening statement, despite having had an eye job and a brow lift and probably Botox too, that keeps his face in a perma-mildly startled/interested freeze. And he’s got that Midwestern exec demeanaor of using a very limited vocal range and not reacting much to anything. So basically his style is to have a poker face and the plastic surgery he’s had enhances that.

    3. Don W.

      Apparently, some of the accounts had fees on them that were taken from the primary account. Hard to say how many of those fees might have gone unnoticed or unrefunded because it was too painful to jump through the hoops to claw back all the money. That could be more than the $185 million cost of doing business tax.

  12. Carla

    I found the headline for this post confusing: I get the “fake accounts” but what was “fake” about the whistleblowing? Seems like that’s the only non-fake part of the whole deal…

    1. Jim A.

      Ostensibly, WF had a way to bypass your boss to report activity that you thought might be illegal, as a way that the bank could find out people who were committing fraud and opening up the bank to liability. But the “fake” part is that it looks like this program was used to identify malcontents not willing to break the law and fire them.

    2. Yves Smith Post author

      Whistleblowing at a company is a process. The process was fake at Wells. Whistleblowing is supposed to lead to an investigation, not to firing the whistleblower. Harvey Pitt said that what Wells allegedly did violates a ton of laws.

  13. DJG

    Here’s the board of directors, from WF web site:
    John D. Baker II, Executive Chairman, FRP Holdings, Inc.
    Elaine L. Chao, Former U.S. Secretary of Labor
    John S. Chen, Executive Chairman and CEO, BlackBerry Limited
    Lloyd H. Dean, President and CEO, Dignity Health
    Elizabeth A. Duke, Former member of the Federal Reserve Board of Governors
    Susan E. Engel, Retired CEO, Portero, Inc.
    Enrique Hernandez, Jr., Chairman, President and CEO, Inter-Con Security Systems, Inc.
    Donald M. James, Retired Chairman, Vulcan Materials Company
    Cynthia H. Milligan, Dean Emeritus, College of Business Administration, University of Nebraska – Lincoln
    Federico F. Peña, Senior Advisor, Vestar Capital Partners, Former U.S. Secretary of Energy and Former U.S. Secretary of Transportation
    James H. Quigley, CEO Emeritus and Retired Partner at Deloitte
    Stephen W. Sanger, Retired Chairman, General Mills, Inc.
    John G. Stumpf, Chairman and CEO, Wells Fargo & Company
    Susan G. Swenson, Chair and CEO, Novatel Wireless, Inc.
    Suzanne M. Vautrinot, President, Kilovolt Consulting, Inc. and Major General and Commander, United States Air Force (retired)

    The usual bunch of ne’er-do-wells and retired clowns. Chao and Pena are the bipartisan-corruption connections. So is Vautrinot, most likely. Duke, Engel, Quigley, and Sanger all should been able to figure out what was going on, if we are to believe their credentials–typical board-member dereliction of duty.

    By the way, the San Francisco HQ undoubtedly appeals to the Innovator-in-Chief, too.

    1. JEHR

      The Canadian connection: John S. Chen as Executive Chairman and CEO of BlackBerry Limited headquartered in Waterloo, ON, Canada. These board members share their expertise with many, many companies. No wonder there is never an improvement in governance via board work.

      Corruption is everywhere.

    2. Jim Haygood

      Warren Buffett had the good sense to stay off the WFC board, for deniability.

      Berkshire Hathaway, helmed by Warren Buffett, holds 10% Wells Fargo’s shares. Despite the bank’s troubles though, Buffett has stayed tight-lipped about Wells Fargo—and he plans to do so for at least another month and a half.

      “If I start commenting on that or anything else, it will lead down too many paths, so I will wait until November to speak about it, the election or any other subject,” Buffett told Fox Business late Tuesday.


      Poor Hillary could’ve taken a clue from the canny old codger:

      Warren Buffett has no computer in his office. Which means he doesn’t do email.

      According to Buffett, the first email he ever sent was to Jeff Raikes, then president of Microsoft. And when that email ended up in a courtroom as part of a lawsuit, it also became the last email he ever sent.


  14. John Medcalf

    Is NC ready to give us a summary of the Oracle of Omaha’s lucrative blindness to corruption among his principal stock holdings ? Years ago when I would spend some time with CNBC I would wince at the fawning over Mr. Buffer. I had no idea the effort he must have needed to keep a straight face.
    Regards to Yves and readers.

    1. steve brassey

      John, years ago > the ’07-’09 subprime collapse, Buffet was interviewed and said that nobody could see it coming. He is the biggest bald-faced liar that ever bullshitted the lamestream and bought and paid for media. Fact of the matter is that he at that time was the largest shareholder of the filthy Moody’s credit rating shysters. When he is into something, believe me you, he knows just about everything pertinent that there is to know. Going back in time, his daddy was politically well-connected and this of course is paramount in Wonderful Warren’s so-called greatness. Reminds me of Prescott Bush, the Nazi collaborator and patriarch to the slimy Bush klan. It goes on and on.

      1. Vatch

        the ’07-’09 subprime collapse, Buffet was interviewed and said that nobody could see it coming.

        Hah! Nobody? Here’s a web article about 6 people who did predict it (Nouriel Roubini, Ann Pettifor, Steve Keen, Dean Baker, Raghuram Rajan, Peter Schiff):


        A seventh person, William White, former chief economist of the Bank for International Settlements, also predicted it, and he was ignored by his colleagues:


      2. ChrisPacific

        If he said that, he was lying outright. Many people saw it coming and Buffett himself was among them. His quote referring to derivatives as “financial weapons of mass destruction” was from 2003, and he subsequently unwound Berkshire’s derivative positions over the following years.

  15. flora

    “The fact that a former HR staffer confirmed that the bank set out to fire whistleblowers is deadly.”

    Yes, yes, and yes. In large organizations, the HR department’s first and primary duty is to protect the organization, not the employees. That includes protecting the organization *from* the employees. A former Wells HR person confirming employees’ charges against Wells is a prosecutor’s dream come true.

    Thanks for this post.

  16. Richard Davet

    Believe it or not in Ohio we have a mecahnism to remedy such fraud.

    ORC 2935.09
    ” A private citizen having knowledge of the facts who seeks to cause an arrest or prosecution under this section….”


    In the Tamir Rice shooting the statute was invoked.

    The statute giving the citizens the right was undermined by the officials failing to abide by their oath of office in administering Ohio laws.

    Do you think by the sheer numbers of people involved here is would make a difference to the officials tasked with protecting us?

    ORC 2935.09

  17. Knute Rife

    Proyect’s review of Stone’s new Snowden film contains Clintstone quote about how Snowden should have followed whistleblower procedures, and he would have had all the protection he needed. That’s right, citizens, just do as you’re told, and you WILL be rewarded. This is the kind of disingenuous, craptastic water carrying for the corporate masters we’ve gotten from the Clintstones and their DLC cronies for 30 years, yet the Hilbots cling to the belief that those of us who won’t vote for her are just brats throwing a tantrum.

    1. reslez

      Snowden was a contractor. From what I remember, this means the normal whistleblower protections didn’t apply to him.

  18. mk

    Wells Fargo is the worst and I speak from personal experience, which I won’t go into here. It will be very sad if DOJ decides not to prosecute these criminals. It would mean DOJ is completely captured, right?

  19. Knot Galt

    IMHO, HR is an important part of the 1%. Neither a lawyer or producer, a human resource professional only exists as a shield between the boss and all the employees that the boss would have to deal worth if it wasn’t for the human resource professional. Over the last 30 years, I have personally witnessed Human Resources devolve into an oxymoron. Human Resources is neither Human nor a resource to humans. Any HR personnel are only play things for the Gods.

    1. jash

      Yes, very shaarp post.

      The hr function as well as the audit function has been transformed into a cheerleader squad for the “greater good”.

      forward Soviet.

  20. Robert NYC

    Ok, now this is getting interesting! Really interesting! I assumed this too would go away after some congressional grandstanding, but these new revelations make that unlikely. Maybe this will be one where some big shots go down. Yves has pointed out that Wells Fargo isn’t as politically connected as its peers and that is true.

  21. ekstase

    Well, on the good side, this story may enable or encourage employees in other occupations to blow the whistle. Courage is contagious, and having some backup for it is huge.

    1. Clive

      Unfortunately whistleblowing is always a high-stakes gamble. In the event of widespread (corporation-wide) wrongdoing such as was the situation at Wells Fargo, it’s almost certainly arisen as a direct result of a looting strategy by top managers. So you’ve got the entire weight of the whole company edifice being brought to bear on anyone who is threatening to expose it and take away the punch bowl while the party is in full swing.

      For every person who manages to stop the activity or (even less likely) gain from their exposure of it, there’ll likely be dozens or even hundreds who get thrown to the wolves.

      But what you say is absolutely right as a statement of admirable principles.

      1. ekstase

        Yes, I guess we’ll see how this plays out. But just the sight of someone who has gotten away with a lot, caught, deer in headlights, gives people a ray of hope. A lot of people are going to think more about where they open their bank accounts.

    2. Tim

      What are you talking about? This sets back whistleblowing big time. Whistleblowers got fired and blackballed from their industry.

      The proper reaction to this for someone with some sense of self preservation is “If I am forced to do something systemic and unethical within a corporation, I shall quietly look for the first opportunity to jump ship and resign.

  22. Elizabeth

    I believe that the FDIC maintains a physical presence at all the TBTJ banks. Is this correct? If so, would the FDIC have been aware of the fraudulent fake accounts and whistleblower reports? I’m just wondering what the FDIC’s role in all of this would be, if any. I’m hoping that the WF rot will be the beginning of prosecutions, but, then again, I’m reminded of my own cynicism.

    1. Yves Smith Post author

      That’s an interesting point, but the FDIC is concerned re lending risk, and the enhanced whistleblower protections started with Sarbanes-Oxley, which is explicitly an SEC enforcement area. So I think not but I can check with Bill Black.

  23. Ned

    This is an outrageous article. Look at Bill Bado’s FINRA record. Guy was with the company for a few months, after being unemployed for two years ha.
    Also, in what world wouldn’t Bado have sued if this were actually true?

    1. Yves Smith Post author

      This is the best you can do? First, this is an ad hominem attack, which is an invalid form of argumentation and against site policy. Second, the story does not hinge on Bado. CNN made clear it had others sources, including employees still at Wells who confirm that they saw firings that looked to be the result of employee complaints. Third, the confirmation by the former HR person that this was corporate policy is devastating.

      Finally, your comment about litigation is laughable and shows you are clutching at straws. Have you ever sued anyone? You are up to $50,000 in costs before you even get very far, and Wells would be sure to throw as much procedural BS at a litigant as possible so as to make suing prohibitive. It’s probably minimum $300,000 to go the distance. And what is he gonna claim in damages? He had a low wage job. He’d get lost wages, reinstatement, and maybe punitive damages, but Wells would sue to get punitive damages overturned on appeal. They’d have decent odds of succeeding, and even if not, they force him to burn another $300,000 in legal. And what do you think it would be like to work for a company where you had to sue to get your crappy low level job back? He’d be harassed every day.

      And don’t tell me an attorney would take it on spec. Because Bado such a low level job with so little in potential damages, no attorney capable of standing up to Wells would take it on. And Bado, who clearly does not have a lot of money, would still have to fund expenses. That’s a requirement to prevent attorneys from “fomenting litigation,” that even in cases on spec, the client has to pay expenses themselves, on a current basis. I’ve been in that situation, with a FOIA suit. Just to get to a first hearing was thousands of dollars in expenses. His case would involve a lot of depositions, which means hiring recording services, and the bill on that runs up even faster than on my very simple FOIA case, which failed early and did NOT involve depositions.

      Better trolls, please.

  24. Jim Haygood



    Old-timers will recall when Enron’s Jeffrey Skilling was obliged to resign from his advisory positions with the Dallas Fed.

    Sad when our valiant central bank loses access to these repositories of wisdom. :-(

  25. Spencer

    It is unethical for special interest groups to have preferential, indeed a crony self-serving privilege, i.e., sovereign right, to profit from the creation of the publics’ legal tender.

    As Willie Sutton said: his reason for robbing banks is ‘That’s where the money is’.

    The great German poet and playwright Bertolt Brecht would have agreed and once said it was “easier to rob by setting up a bank than by holding up (one).”

    Thomas Jefferson’s my favorite: “I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies.”

  26. Karl

    Read the Classic:


    University of Texas Press ISBN 978-0-292-75418-8

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