Four foreign-exchange bankers at Wells Fargo have been fired after an investigation that was conducted by regulators as well as the bank itself. This is an indication that the bank’s problems were not confined to its retail-banking unit but has now spread to its investment banking business. After staff at the bank were found to have opened fake authorized accounts in order to make sales appear stronger than they really were, a review later found that the bank had improperly charged its customers for certain mortgage and auto insurance products.
Though reasons for the firing of the four foreign-exchange bankers have not been made public, it is believed there was a strong justification for the move. According to sources those fired include the chief spot dealer, Michael Schaufler; Jed Gruenther, a foreign exchange regional head; Bob Gotelli, foreign exchange sales head and Simon Fowles, the foreign exchange trading head. Wells Fargo has since then appointed Ben Bonner to head its foreign-exchange business.
Wells Fargo Securities
Sara Wardell-Smith, the executive who was previously heading Wells Fargo’s foreign exchange group, now has a new role. In her LinkedIn profile, the new role began in October and involves leading part of the financial institutions group of Wells Fargo. Wardell-Smith joined Wells Fargo in 1995 and has served in various capacities.
The investment banking business of Wells Fargo falls under Wells Fargo Securities. Per Dealogic, a research firm, the investment banking market share of Wells Fargo in the United States is currently around 4%.
Earlier in the week a confidential report was sent to Wells Fargo by the Office of the Comptroller of the Currency on matters concerning the motor vehicle insurance product issues. According to sources the report said that the bank will be required to refund the customers over $80 million which had been previously cited by the bank.
Senate Banking committee
The firings at the foreign exchange unit of Wells Fargo comes a few weeks after the chief executive officer of the bank, Timothy Sloan, was criticized during a hearing by the U.S. Senate Banking committee over the culture and conduct of the bank including how so many problems happened for so long without anything being done about it. Senator Elizabeth Warren, a Democrat of Massachusetts, said the bank needed to take sterner action over the numerous scandals. Warren also called for Sloan to be fired. In his defense Sloan said he had instituted several changes at the bank in the course of the last one year.