Two former employees of Wells Fargo Bank have filed what could be the first of many cases against the bank, which is being scrutinized for alleged banking fraud.
Regulators fined Wells Fargo, one of the nation's largest banks, $185 million earlier this month for fraudulently opening more than two million deposit and credit card accounts that may not have been authorized by consumers.
Last week, Wells Fargo CEO John Stumpf was grilled by Senate Banking Committee for the bank's pressuring employees to follow the account-opening practices and, subsequently, for not making senior executives surrender pay for their roles in the scandal.
In a suit filed last week in California Superior Court in Los Angeles County, two former employees Alexander Polonsky and Brian Zaghi said they were among those wrongfully terminated because they "did not meet their impossible quotas" and were made an example of "so that all other employees would learn that they must engage in these fraudulent actions in order to meet the unrealistic sales quotes or else lose their jobs."
The former bankers say that Wells Fargo district managers constantly monitored employees, discussing progress toward quotes four times daily. The goal, they say: eight Wells Fargo accounts per household.
"Managers often tell employees to do whatever it takes to reach their quotas," the suit says. Workers who did not meet their daily quota were required to work extra hours without pay, they say.
The "fraudulent scam," they say in the suit, for which they are seeking class-action status, was meant "to squeeze employees to the breaking point so they would cheat customers so that the CEO could drive up the value of Wells Fargo stock and put hundreds of millions of millions of dollars in his own pocket. Wells Fargo could then place the blame on thousands of $12 an hour employees who were just trying to meet cross-sell quotas that made the CEO rich."
This follows the call from several U.S. senators -- after the Banking Committee hearing -- for an investigation into Wells Fargo's employment practices, to look into whether the bank pressed workers to meet sales quotas with unpaid overtime, harassment and "threats of termination."
Wells Fargo declined comment on the suit. The company said it has fired about 5,300 employees over the bogus accounts and, starting January 1, would eliminate certain quotas for higher-level bank managers.