Wells Fargo In Hot Water Again for Ex-Employee U5 Termination Marks

Wells Fargo is under scrutiny again as of Thursday for hundreds of termination notices the bank filed with the Financial Industry Regulatory Authority (FINRA). If a broker leaves a bank, voluntarily or otherwise, the company is required to filed a notice with FINRA called a U5 termination notice. In this form, it includes a field where the bank must disclose any allegations that played a role in the employee’s departure. Sometimes, this can lead to it being hard for the former employee to find new employment. Many former employees of Wells Fargo claim that the bank used that power to retaliate against anyone who tried to blow the whistle on the bank’s recent fraudulent activities. In this case, senators attacking the bank reveal that the U5 notices they compiled “confirmed that Wells Fargo had ample information about the scope of fraudulent sales practices.” They also stated that “public reports indicate that Wells Fargo may have filed inaccurate or incomplete Form U5s for fired employees and that the bank may have done so to retaliate against whistleblowers. If this is the case, Wells Fargo concealed key information from regulators.”

The bank acknowledged that in September it fired 5,300 employees in the last five years for creating as many as two million bank and credit card accounts not authorized by customers. Around 600 of those were registered with FINRA, but only 200 of them were specifically terminated for issues related to the sham accounts, according to FINRA documents. The senators are now questioning the bank as to why it didn’t include negative marks in the other 400 employee files. That information could have led to the detection of illegal activity much sooner. This is not the first time Wells Fargo has gotten in trouble for U5 marks. In 2011, it paid $1 million in fines to FINRA for failing to submit some of the forms on time. Also in 2011, FINRA ordered Wells Fargo to pay a former broker Maxim Minevich, $500,000 for defaming him in a U5 filing. Please call our law offices today at 312-332-4200 for a free consultation with one of our attorneys.

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