“Ex-Wells Fargo Worker: Intimidation Included No Bathroom Breaks”


According to the article, harassment, intimidation, even bathroom breaks denied. That’s some of the “unconscionable behavior” a former Wells Fargo worker drove five hours to confront a bank executive about.

Nathan Todd Davis said at a California State Assembly hearing on the Wells Fargo fake account scandal that he filed 50 ethics complaints during his decade of working at Wells Fargo — but nothing was ever done.

“I’ve been harassed, intimidated, written up and denied bathroom breaks,” said Davis, who drove 350 miles from his home in Lodi, California, to speak at the hearing.

The former Wells Fargo worker directed his complaints to David Galasso, a senior Wells Fargo executive who was filling in at the hearing for CEO John Stumpf.

“The sales culture of Wells Fargo needs to be picked apart,” he said, standing at the podium but looking to his right to address Galasso. Davis estimated that almost two-thirds of Wells Fargo employees “cheat the system” due to unreasonable sales pressure.

After a decade at Wells Fargo, Davis said he was fired in June 2016 for being “90 seconds late to work.” The real problem, he said, was that he never “made it to management because I don’t cheat.”

Galasso, who serves as Wells Fargo’s head of community banking in Northern and Central California, did not address Davis’ comments directly.

Wells Fargo declined to comment on the individual allegations, but said in a statement that it tries to make every employee “feel valued, rewarded and recognized.”

The allegations by Davis echo ones made by other former and current Wells Fargo employees. After regulators accused Wells Fargo of creating as many as 2 million unauthorized accounts, workers reached out to lay the blame on the bank’s unrealistic sales goals that led many to cheat. Other former Wells Fargo workers believe they were retaliated against after they called the ethics line. The Labor Department has since said it’s reviewing whistleblower retaliation complaints against Wells Fargo.

“What the Wells Fargo Fake Accounts Scandal Says About Flaws at the SEC”


Note: This is an opinion piece written by Eleanor Bloxham, CEO of The Value Alliance, an independent board education and advisory firm. She is the author of two books on corporate governance and valuation.

According to the article, while all eyes have been on Wells Fargo in the wake of the bank’s fake accounts scandal, there is another, not so apparent culprit at the heart of the crisis: the U.S. Securities and Exchange Commission.

Under SEC Chair Mary Jo White’s watch, the agency has failed to enforce disclosure requirements at Wells Fargo and elsewhere at a time when trust in big business has hit historic lows.

The SEC’s corporate disclosure rules exist to forewarn investors about major issues that could affect a company’s well-being. Yet investors and the public were surprised last month by the alleged widespread multi-year Wells Fargo fraud.

The SEC had many opportunities to step in to make sure investors learned about Wells Fargo’s problems much sooner. Instead, the opposite happened. In early 2014, the agency allowed Wells Fargo and another major bank to exclude shareholder proposals from New York’s comptroller that would have provided investors with information on which employees were “capable of exposing them to major losses” because of their “bonus incentives.” As a result, Wells Fargo investors never even had a chance to vote on the measure, despite the Los Angeles Times’ Wells Fargo investigation two months earlier that had revealed “forged client signatures” and “incentive pay linked to sales.”

Under White’s watch, the SEC has been soft in enforcing disclosure requirements related to risky compensation, which were issued after the 2008 financial crisis. Any member of the SEC staff who had reviewed Wells Fargo’s 2013 annual pay report would likely have seen that Wells Fargo CEO John Stumpf and his four top lieutenants’ multi-million dollar paychecks included large stock awards as well as annual bonuses tied to sales measures. This should have been viewed as a red flag that Wells Fargo had risky compensation practices — and the board should have described those risks in its annual investor filings.

Regulators knew following the financial crisis that using sales measures to determine bank bonuses created risky behaviors and advised against them. And paying executives in stock has been a major risk concern since Enron and WorldCom. Dick Fuld, CEO of Lehman Brothers, who oversaw that bank’s collapse in the financial crisis, was the poster child for taking risky actions to goose the stock price. At the Wells Fargo Senate hearing last month, Senator Elizabeth Warren told Stumpf that he had pumped up Wells Fargo’s stock price by touting the bank’s sales culture.

The SEC has also been loath to tangle with the external auditors, the CEOs and the CFOs, who sign off on company’s financial statements. According to a New York Times report, Wells Fargo had fake accounts as far back as 2005. So for an extended time (how long exactly is unclear), Wells Fargo did not know (nor did the board’s audit committee know) whether accounts and income on its books were valid or not. If that is not a material control weakness that should be disclosed (in other words, an operational deficiency, which could cause reported numbers to be wrong), what would be?

The SEC has not just failed by omission. Against investor wishes, White has personally advocated for changes to disclosure rules at all U.S. public companies, which include eliminating important executive compensation information from investors’ voting materials.

If we are to prevent another Wells Fargo-type fiasco, we must do more than focus on one company’s management, as important as that may be. We must also look at the broken regulatory systems that enabled it.