Wells Fargo has fired four bankers in its foreign-exchange unit as the San Francisco-based bank and regulators investigate the business, the Wall Street Journal reported Friday.
A spokeswoman for the bank confirmed to the Observer that the four bankers are no longer with the bank but did not provide any details about the departures or the investigation. Another banker formerly with the business has taken a new assignment in the company.
The investigation is the latest problem to flare up at a bank that is still trying to recover from a sales scandal in its retail bank that erupted last fall, spurring regulatory penalties, congressional inquiries and a CEO change. The latest probe is taking place in a new area: the corporate and investment bank that has a significant Charlotte presence.
Separately on Friday, the New York Times reported that a federal regulator blasted Wells Fargo this week in a preliminary report on an auto insurance product that has emerged as another trouble spot. Wells committed unfair and deceptive practices, failed to properly manage its risks and did not set enough funds to reimburse harmed customers, the newspaper reported.
Sign Up and Save
Get six months of free digital access to The Charlotte Observer
The bank, which ended the insurance program in September 2016, set aside $80 million to compensate 570,000 customers who it said were harmed by receiving unwanted auto insurance. But the report by the Office of the Comptroller of the Currency found that may not be enough money, according to the Times.
In yet another matter, Wells Fargo also said last week it set aside $1 billion to cover expenses associated with previously disclosed mortgage investigations, helping to depress its third-quarter earnings by 18 percent compared with a year ago.
Earlier this month, Wells Fargo CEO Tim Sloan faced tough questioning before the Senate Banking Committee over the bank’s scandals. Sloan apologized for the company’s conduct and said Wells was “a better bank today than it was a year ago.”
In the foreign-exchange matter, it’s not clear what led to the departure of the four bankers: Simon Fowles, Bob Gotelli, Jed Guenther and Michael Schaufler. The Wells Fargo Securities foreign exchange business, the spokeswoman said, “will continue to serve our customers under the leadership of Ben Bonner,” a Charlotte-based executive.
Among the departing executives, Guenther had been based in Charlotte. LinkedIn pages for Fowles and Gotelli indicate they work in California; a page for Schaufler could not be found. The four bankers could not be reached for comment.
Another banker in the business, Sara Wardell-Smith, has taken a new position as Americas regional leader in Wells Fargo’s financial institutions group, based in San Francisco, the Wells spokeswoman said.
Wells Fargo Securities provides corporate clients with Wall Street-style services such as merger advice, stock and bond offerings, and securities trading. It’s part of the wholesale banking unit that made about one-third of the bank’s $21.9 billion in revenue in the third quarter.
The unit has about 5,000 employees worldwide, with the largest portion based in Charlotte, including those who work on a trading floor in the Duke Energy Center. In June, the bank named two Charlotte-based executives, Walter Dolhare and Rob Engel, as co-heads of Wells Fargo Securities.
Wells Fargo had not been a big player in investment banking and capital markets until it bought Charlotte-based Wachovia in 2008.