Wells Fargo Bank Shines Spotlight on FINRA Form U-5 Abuses

The ongoing scandal involving Wells Fargo Bank demonstrates that although the wheels of justice often turn slowly for security industry employees, they can in fact turn. It also shows that the Financial Industry Regulatory Authority (FINRA) has FINRA Form U-5 abuses firmly on its radar. That is good news for security industry employees who have been damaged by an employer that filed false and defamatory information on a FINRA Form U-5 report when they were terminated.

If you work in the securities industry and believe your former employer included false and defamatory information on your FINRA Form U-5, you should contact us. Kilgore & Kilgore has been successful in getting the defamation expunged from a FINRA Form U-5 and in recovering compensatory damages from the employer on behalf of our clients. Click here to connect with a Kilgore & Kilgore attorney for a free evaluation of the facts of your case: Contact Kilgore & Kilgore.

Consumer Financial Protection Bureau Fines Wells Fargo Bank

Over the last several months, the Wells Fargo Bank scandal has produced an alternating series of revelations and investigations. In September 2016, the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo Bank $185 million. The CFPB alleged that Wells Fargo Bank employees created more than 2 million bank accounts or credit card applications without their customers’ knowledge or permission. Wells Fargo Bank staff was reportedly motivated to open these fake bank accounts by pressure from supervisors to meet corporate goals and obtain incentive compensation rewards.

Wells Fargo Bank Reports Fired Employees on FINRA Form U-5

Wells Fargo Bank said it fired about 5,300 retail banking employees since 2011 for creating the fake bank accounts and applications. Approximately 600 of the fired employees were registered with FINRA. Wells Fargo Bank was required to file a FINRA Form U-5 within 30 days of firing the wrongfully terminated FINRA-registered employees. The FINRA Form U-5 must include details regarding the reasons the employee was fired. Of those 600 FINRA-registered employees that were fired, at least 207 were reportedly terminated for issues related to the fake bank accounts scandal. Each received negative comments from Wells Fargo Bank on his or her FINRA Form U-5 report that could be construed as defamation.

Terminated Employees Claim Defamation by Wells Fargo Bank in their FINRA Form U-5 Reports

In October, NPR reported that some Wells Fargo Bank employees said they were fired for trying to blow the whistle on the fake bank accounts scandal. The interviewed employees said they were fired or pushed to resign after resisting pressure to sell unwanted products to customers and for reporting unethical practices. The employees said that after they blew the whistle and refused to sell unwanted products, Wells Fargo Bank wrote false and defamatory information on their FINRA Form U-5s. As a result, they were not able to find new jobs in the securities industry. According to the New York Times, Wells Fargo Bank allegedly wielded the FINRA Form U-5 as a weapon “with little regard for the damage that inaccurate or imprecise allegations could inflict on people’s careers.”

Negative FINRA Form U-5 Reports Make It Almost Impossible to Get a New Job in the Securities Industry

FINRA allows the public to access the FINRA Form U-5 information about securities industry employees. The goal of the FINRA Form U-4 and FINRA Form U-5 system is to hold financial advisers, brokers and bankers who sell securities accountable for wrongdoing. However, negative information on a FINRA Form U-5 makes it difficult, if not impossible, for a securities industry professional to get a new job in the securities industry.

Please refer to our previous blog post titled “Compensatory Damages from FINRA Form U-5 Defamation Claims” by clicking here Previous FINRA Post. Kilgore & Kilgore’s FINRA attorneys assist clients through the FINRA arbitration process. We have been able to get false and defamatory information expunged from a FINRA Form U-5. Our employment lawyers Dallas have also been successful in helping employees file claims against their former employers for defamation and wrongful termination.

Going through the FINRA arbitration process to expunge false and defamatory information on a FINRA Form U-5 involves a different process from other employment claims of this nature. Our attorneys can successfully handle the complexities of the FINRA arbitration process.

U.S. Senators Highlight Potential Wells Fargo Bank FINRA Form U-5 Abuse

Once NPR reported that Wells Fargo Bank had allegedly used the FINRA Form U-5 reports to silence or retaliate against employees, the U.S. Congress took note. In November, the Senate Banking Committee openly questioned if Wells Fargo Bank used unfavorable FINRA Form U-5 filings as a means of retaliating against employees who attempted to blow the whistle on the fake bank accounts problem.

“These accounts raise questions about the accuracy of Wells Fargo’s form U-5s for employees who were fired for engaging in illegal activity and for employees who appear to have been fired for blowing the whistle on illegal activity at Wells Fargo,” the senators wrote.

FINRA Investigates Potential Wells Fargo Bank FINRA Form U-5 Abuse

In December, it was reported that FINRA was asking former Wells Fargo Bank employees to contact FINRA if they have issues regarding the reasons they were fired. FINRA had also announced that it planned to look into the FINRA Form U-5 filings regarding the 207 former Wells Fargo Bank employees that are FINRA-registered.

“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,” FINRA explained in a press release.

“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 U-5 termination notice within 30 days of being terminated as required … or that their Form U-5 contained inaccurate or incomplete comments related to the reason for the termination,” it said.

FINRA said it wants to “review the facts and circumstances surrounding these allegations.”

This scandal at a high profile company such as Wells Fargo Bank focuses attention on FINRA. Congress is taking potential false and defamatory information on the FINRA Form U-5 statements seriously. If you think a previous employer included false and defamatory information on your FINRA Form U-5, contact an experienced Kilgore & Kilgore FINRA attorney.

Kilgore & Kilgore Attorneys Have Won Compensatory Damages in FINRA Form U-5 Cases

In FINRA arbitration proceedings, compensatory damage awards have been won by Kilgore & Kilgore attorneys. False and defamatory information has been expunged from FINRA Form U-5. To obtain such an award is a complex legal process involving FINRA rules and procedures plus state defamation law. Kilgore & Kilgore can provide the legal experience needed. To learn more about our securities industry and FINRA law practice, click here: Dallas FINRA Attorney. To get started on a free review of the facts of your case, click here: Contact Kilgore & Kilgore.

Leave a Reply

Your email address will not be published. Required fields are marked *