Some whistleblowers left in the lurch by agency delay

Many have heard about the recent disclosures regarding Wells Fargo & Co. opening unauthorized accounts for clients, which forced the bank’s Chief Executive Officer to resign abruptly under a cloud of controversy. As it turns out, however, enforcement authorities have known for many years about Wells Fargo’s apparently systemic and systematic legal violations. This revelation is obviously troubling from a consumer protection standpoint, but it also underscores the lack of adequate resources for, and the transparency and accountability of, all enforcement agencies.

Notably, between 2009 and 2014, at least 5 former Wells Fargo employees reported to the United States Occupational Health and Safety Administration that the bank fired them in retaliation for lodging complaints about employees opening unauthorized accounts. The case of a former Wells Fargo general manager, Ms. Claudia Ponce de Leon, provides perhaps the most troubling example of the delay that has essentially aided and abetted corporate misdeeds to the detriment of employees, consumers, and the broader public interest. Ms. Ponce de Leon filed her whistleblower complaint with the government in December 2011, but Federal investigators reportedly still have not even interviewed her. In response to this remarkable situation, the United States Department of Labor Secretary, Mr. Thomas Perez, recently launched a “top-to-bottom” review of prior Wells Fargo whistleblower complaints.

Fortunately, it is not all doom and gloom when it comes to enforcement agency action. The very same Wells Fargo provides a positive example of government enforcement activity. The United States Consumer Finance Protection Bureau and other regulators recently extracted $190 million in fines and customer restitution from Wells Fargo to settle pending claims. Given the evident seriousness and scope of Wells Fargo’s violations, as well as the immense wealth of that bank, far more must be done to obtain full accountability and otherwise restore the rule of law in the financial sector.