WASHINGTON, December 13, 2016 — The Financial Industry Regulatory Authority (FINRA) is suggesting that Wells Fargo retaliated against certain whistleblowing employees by manipulating their securities registration documents. A FINRA press release stated
“The Financial Industry Regulatory Authority (FINRA) has asked former Wells Fargo bank employees whose securities registrations were terminated to contact FINRA if they have concerns about the notice filed by Wells Fargo regarding their termination. Recent news reports have highlighted several former Wells Fargo bank employees who believe that they were terminated from the bank for reporting or refusing to engage in allegedly fraudulent account-opening activities. Further, the reports indicate that a subset of these individuals who were also registered with FINRA to conduct securities activities have raised concerns that they did not receive a copy of their Form U5 termination notice within 30 days of being terminated as required by FINRA rules, or that their Form U5 contained inaccurate or incomplete comments related to the reason for the termination.”
FINRA, which “regulates all securities firms doing business in the United States, FINRA is tasked with ensuring investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services.
In practice, FINRA touches virtually every aspect of the securities business, from registering and educating industry participants to examining securities firms, writing rules, enforcing those rules and Federal securities laws, and informing and educating the investing public,” according to the same press release, which also called on broker/dealers to call their hotline number, at (800) 334-0668 or U5review@finra.org to report this activity.
Whenever a broker/dealer leaves a firm for any reason, A U5 is filled out and submitted to FINRA. The implication in this case is that the appropriate forms either weren’t provided to the broker/dealers in time for filing or the reasons for the broker/dealer’s departure were falsified. Depending on the reason for termination, information on or about a U5 could lead to the suspension or revocation of a broker/dealer’s license.
Helen Bow, a public affairs officer with Wells Fargo issued this statement exclusively to The Industry Spread:
“If any former team member has concerns with their termination or a U5 filing then we want to hear from them. Wells Fargo is required to file U5 forms whenever a FINRA-registered team member leaves the company so that the industry is aware of the circumstances. We work to make sure those forms are accurate and fair, and in all cases a former employee can make comments on their U5 or request that we review the language.”
In November, Senator Elizabeth Warren (D- MA) sent a letter to Wells Fargo Chief Executive Officer Tim Sloan asking, “whether the bank filed inaccurate reports to the Financial Industry Regulatory Authority,” according to a story from Investment News on the letter. “In one instance, a terminated worker who said she spoke out was listed as failing to perform her job duties in a report that Wells Fargo filed with Finra,” the story notes.
Whistleblowers who spoke to CDN said this sort of attack, which involves attacking a whistleblowers’ professional credentials, is quite common, not only in the securities business but elsewhere.
Jim Singer is a former psychologist who, after reporting suspected child abuse had six complaints filed against him, all within six months, to the Pennsylvania Psychology Board. As a result, the Board removed his license to practice for improper coding of Medicare bills. Singer had been in practice for fifteen years prior to this point, and no complaints had been filed against him before he made his allegations.
“This sort of retaliation (attacking a professional license) is more prevalent than you and I know.” Singer said, noting that any practicing professional who holds a license should be prepared for retaliation due to whistleblowing activities, including the revocation of that license.
Michael McCray is a former US Department of Agriculture (USDA) employee who was terminated and black-balled from working for the US federal government after reporting the alleged misuse of $40 million in a USDA Empowerment Zone.
He called the suggestion in the press release part of a pattern of attacking whistleblowers’ livelihoods, and said he’s seen national security whistleblowers lose their security clearances and medical professionals lose their medical licenses, and what’s alleged in the Wells Fargo case— the potential loss of an individual’s broker/dealers license — is similar.
Jim Murtagh became a well-known whistleblower after his $1.6 million settlement with Emory University became public. He said the type of retaliation suggested here is just one bullet in a full arsenal of retaliatory techniques, “we can expect a corporation to retaliate (against whistleblowers) on any level necessary.”
Nancy Condon, a spokesperson with FINRA, did not respond to a phone message for comment.