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MarketScreener Homepage  >  Equities  >  Nyse  >  Wells Fargo & Company    WFC

WELLS FARGO & COMPANY

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Wells Fargo : Probe Hampered by Its Outside Lawyer, Labor Department Says -- 2nd Update (Jan. 5)

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01/06/2017 | 06:35pm EST
By Emily Glazer 

The U.S. Labor Department says an attorney representing Wells Fargo & Co. tried to hamper an investigation into the bank's treatment of employees and in doing so cited a possible role in the coming Trump administration, according to a letter reviewed by The Wall Street Journal.

The Labor Department probe is focused on whether Wells Fargo skirted overtime rules, among other potential labor issues, in a bid to meet lofty sales goals. The agency began its inquiry after the San Francisco bank in September agreed to a $185 million regulatory settlement and enforcement action for illegal practices that included employees opening accounts without customers' knowledge.

The Labor Department said in a mid-December letter that an outside attorney for the bank, Tammy McCutchen, tried to block an agency investigator from accessing records or conducting interviews at a Wells Fargo facility in Concord, Calif.

"When our investigator responded that the agency retains the authority to conduct investigations as delegated to us by the secretary of Labor and that we planned to proceed with visiting the establishment the next day to conduct interviews, you responded that in a few weeks a new administration would be in place and that you might be part of that administration," the department said in the letter sent to the attorney.

Ms. McCutchen is a lawyer at employment and labor relations firm Littler Mendelson PC and from 2001 to 2004 was administrator of the Labor Department's Wage and Hour division. The letter was sent by a Labor Department Wage and Hour division administrator, David Weil, on Dec. 16.

Through a Littler Mendelson spokeswoman, Ms. McCutchen said Thursday that she disputes the events cited in the letter and denies any improper statements or conduct.

"Never before have I been the subject of assertions such as those contained in the letter and I believe that my reputation for collegiality, ethics and professionalism, both while defending our firm's clients and during my previous tenure at the [DOL's Wage and Hour Division], is well known."

The spokeswoman added in a Friday statement that the investigator provided Wells Fargo with less than 24 hours notice of in-person interviews at the bank's facility, and Wells Fargo gave access within 72 hours of the request. It is also in the process of providing or already provided data and documents the DOL requested.

Wells Fargo spokeswoman Jennifer Dunn said Thursday that the bank is cooperating with the Labor Department and will continue to do so. "We are unaware of any basis for these surprising allegations, which are counter to the commitment we have to fully cooperate with all government investigations," she said.

A Labor Department spokeswoman declined to comment. The Trump transition team didn't immediately respond to requests for comment.

In the Labor Department's letter, Mr. Weil said that regardless of whether Ms. McCutchen may end up with a position in the new administration, "citing such a role in the context of an investigation represents a potential violation of the requirements of recusal from matters related to the activities of agencies for transition team members."

Mr. Weil added that "your conduct could be perceived as an intention to intimidate a government official in the conduct of their official duties."

Labor Department Secretary Thomas Perez in late September announced a review of all Wells Fargo cases, complaints and other alleged violations in a letter sent to Sen. Elizabeth Warren (D., Mass.). It followed an earlier letter from Democratic senators, including Sen. Warren, urging a Labor investigation over whether the bank skirted overtime laws and failed to properly compensate bank tellers and associates who worked long hours to meet sales quotas, or salaried bank associates misclassified as overtime-exempt officers.

Along with the Labor Department investigation, Wells Fargo is facing numerous other federal and state probes into its sales practices, including inquiries by the Justice Department.

After the presidential election, though, analysts said investors may believe Wells Fargo's troubles might abate under a Trump administration that could treat bank enforcement and investigations less harshly.

The Labor Department monitors a range of matters, including wage and hour rules, whistleblower-protection laws and workplace safety.

The incident that prompted the Labor Department complaint occurred on Nov. 29, according to Mr. Weil's letter. It said Ms. McCutchen called the lead Labor Department investigator on the Wells Fargo case and indicated the agency wouldn't have access to records or interviews until she could review them.

The investigator said the Labor Department would wait for records but continue with interviews. Ms. McCutchen, however, said she wouldn't allow that to happen since they would be "disruptive" to the bank's operations, according to the letter.

Write to Emily Glazer at emily.glazer@wsj.com

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Financials (USD)
Sales 2019 84 415 M
EBIT 2019 29 248 M
Net income 2019 20 024 M
Debt 2019 -
Yield 2019 3,56%
P/E ratio 2019 11,9x
P/E ratio 2020 12,4x
Capi. / Sales2019 2,70x
Capi. / Sales2020 2,84x
Capitalization 228 B
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Average target price 50,81  $
Last Close Price 53,80  $
Spread / Highest target 11,5%
Spread / Average Target -5,55%
Spread / Lowest Target -21,9%
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Charles William Scharf President, Chief Executive Officer & Director
Elizabeth A. Duke Independent Chairman
John R. Shrewsberry Chief Financial Officer & Senior Executive VP
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Gary Owen Chief Information Security Officer
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