Wells Fargo Fires Up To 125 Workers Over Fraudulently Tapping Coronavirus Relief Loans: Report

Wells Fargo & Company WFC terminated more than 100 employees for allegedly collecting coronavirus relief funds in an improper manner, Bloomberg reported Wednesday.

What Happened: The San Francisco-headquartered bank said in an internal memo seen by Bloomberg that the staff members defrauded the Small Business Administration “by making false representations in applying for coronavirus relief funds for themselves.”

David Galloreese, Wells Fargo’s head of human resources, wrote in the memo that the bank had terminated the employees and would “cooperate fully” with law enforcement.

“These wrongful actions were personal actions, and do not involve our customers,” said Galloreese.

The total number of terminated employees number between 100 and 125, a person familiar with the matter told Bloomberg.

The memo stated that the bank continues to look into “these matters,” and if it identifies additional wrongdoing it would take “appropriate action.”

Why It Matters: JPMorgan Chase & Co JPM earlier found more than 500 employees had applied for loans under the Economic Injury Disaster Loan program and dozens did so wrongfully, Bloomberg noted.

The Jamie Dimon-led bank fired a number of employees after it concluded its investigations for accessing the EIDL program improperly.

The investigation was spurred after SBA asked banks to investigate suspicious activity.

JPMorgan is also investigating fraud linked to the Paycheck Protection Program, a support measure for small businesses, for which it dished out loans to the tune of $29 billion.

In April this year, the Consumer Financial Protection Bureau fined Wells Fargo $1 billion for abusive lending and improper auto insurance practices.

Price Action: Wells Fargo shares closed nearly 6% lower at $23.25 on Wednesday and rose 0.17% in the after-hours session.

Photo courtesy: MiosotisJade via Wikimedia

Posted In: big banksCoronavirusCovid-19economic stimulusGovernmentNewsRegulationsManagementMedia