Wells Fargo Scandal Exposes Cracks In Whistleblower Program

Wells Fargo Whistleblowers Ignored

Nearly five years ago, former Wells Fargo general manager Claudia Ponce de Leon filed a whistleblower account with the federal labor regulators to report that she lost her job after she told management that other employees were opening unauthorized accounts.

Though her report was filed back in December 2011, Reuters reported on Thursday (Oct. 13) that investigators at the Labor Department’s Occupational Safety and Health Administration (OSHA) have yet to interview Ponce de Leon about her accounts.

“It’s absolutely outrageous that whistleblowers contacted OSHA as early as 2009 about potential fraud at Wells Fargo, and yet these government bureaucrats failed to do their job,” Sen. David Vitter, a Louisiana Republican who has been looking into the scandal’s impact on SMB owners, told Reuters.

Ponce de Leon’s compliant happens to be just one of several dozens that have been filed against the financial institution over the past 14 years.

The discovery of these complaints and the lack of follow-up on OSHA’s part highlights a well-reported problem the organization has been flagged for in the past.

According to department data Reuters obtained through a public records request, as of Oct. 6, the agency still had 34 open complaints of the 91 it has received from Wells Fargo employees since fiscal year 2002. All of the complaints allege retaliation from the bank after reporting employee misconduct and potential wrongdoing.

Given the sum total of recent events, it is not terribly surprising that John Stumpf  announced his resignation as chairman and CEO of Well Fargo bank.

Stumpf will be stepping down from both his roles at the nation’s third-largest U.S. bank by assets — effective immediately. Stumpf’s role will be filled for the time being by President and Chief Operating Officer Timothy J. Sloan, who was widely seen as his heir apparent.

According to internal reports, Stumpf officially announced his decision to retire in a letter Wednesday (Oct. 12). The letter confirmed that Stumpf will sell none of the shares in the bank he owns until the conclusion of an independent investigation. Those shares may or may not be liable to a “clawback” depending on the results of an internal investigation. That could include an additional $24 million being returned.