Wells Fargo on Thursday announced the creation of an ethics office that will be headed by a Charlotte-based executive as the bank tries to push past a fake-accounts scandal.
Theresa LaPlaca, a former Wachovia executive, will lead on an interim basis the Office of Ethics, Oversight and Integrity, the San Francisco-based bank said. LaPlaca, a senior leader in Wells’ Wealth and Investment Management unit, will report to Chief Risk Officer Mike Loughlin, who is based in San Francisco.
The office’s formation comes as Wells Fargo CEO Tim Sloan is seeking to rebuild the bank’s image in the wake of the scandal that led to the departure of Sloan’s predecessor and a bevy of investigations.
“This group will be tasked with ensuring a consistent process for identifying, assessing, investigating, correcting and reporting on practices that do not align with our expectations for high ethical standards and excellence in risk management,” Sloan said in prepared remarks for a companywide address he gave in Dallas on Thursday.
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Sloan said the office will house four pre-existing groups that were responsible for “issues research and escalation” – global ethics and integrity, sales practices oversight, internal investigations and complaints oversight. Previously, those groups reported to different areas within the bank.
Wells Fargo had disclosed the office’s creation to employees earlier in the week on the company’s intranet.
In a statement to the Observer, Wells spokeswoman Richele Messick said the office “will work to ensure that we are doing business consistent with our vision and values, that team members and customers are protected and that feedback is received and acted upon when team members come forward with concerns.”
Wells Fargo also Thursday announced the formation of a Rebuilding Trust office, headed by San Francisco-based executive Justin Thornton. Sloan said the office will support Sloan’s “highest priority” – rebuilding trust with employees, customers, communities, regulators and shareholders.
The moves mark the latest efforts by Wells to right itself after authorities fined it $185 million in September over claims employees opened more than 2 million accounts potentially without customer authorization to meet high-pressure sales goals. Some former employees have accused the bank of retaliating against them, including by being fired for reporting such sales practices to the bank in the years leading up to the fine’s announcement.
On Thursday, Sloan provided an update on previously announced promises to review how complaints to its ethics lines have been handled. He said the bank reviewed all reports made to the line over the past five years in which the caller had self-identified.
From there, a third party examined cases in which employees were terminated within 12 months of filing their reports, Sloan said. The bank also looked at retaliation claims from former employees who either contacted the media or Wells’ employee relations team after the September fine was announced, he said.
A “few cases” among hundreds that were reviewed “raised questions,” Sloan said, “and we are following up on each of them.”
“Even though it’s a very small number, anything more than zero is too large,” he said.
Wells Fargo is expanding the review to include reports to the ethics line in the past five years in which employees received corrective action short of termination within 12 months of filing their reports, Sloan said Thursday.