The feds just admitted that they had access to hundreds of whistleblower complaints as early as 2010, but did nothing to impede Wells Fargo’s bogus-account scandal. An investigation by the Office of the Comptroller of the Currency (OCC) found that the country’s chief federal banking regulator’s oversight of the banking giant’s activities was “untimely and ineffective.”
The regulator admitted that it had numerous “red flags” and ignored 700 complaints by whistleblowers familiar with the bank’s aggressive sales tactics. The OCC found that federal regulators missed numerous opportunities to prevent the bank’s employees create millions of fake accounts for the sake of investors.
The OCC did not question Wells Fargo about the overwhelming number of whistleblower complaints. The agency, though, found no evidence that federal regulators probed the root cause of those complaints.
The root cause was the aggressive sales tactics with nearly-impossible sales targets which added tremendous pressure on the company’s employees. Around 5,300 people were fired in the wake of the scandal and 2 million accounts closed.
A separate investigation revealed that bankers were forced to open eight accounts for every client. Those workers lost their jobs. Wells Fargo’s top management ignored the issues even though they knew about the problem as early as 2004.
A 2005 internal report shows bank managers knew that most of firings and ethics complaints were linked to sales goal violations. The bank claims that the problems were first brought to the higher management’s attention as “noteworthy risks” in 2014.
OCC inspectors found that Wells Fargo knew about the practices “since at least 2010.” In 2016, federal authorities finally sanctioned the banking giants sparking a monster scandal. The bank agreed to pay $185 million to settle the issue, but refused to fire its top managers. Instead it sacked 5,300 employees which prompted a congressional review.