Three senators write to Wells Fargo chief over hundreds of termination notices in five years

Three senators took aim at Wells Fargo's new chief executive on Thursday over hundreds of termination notices the bank filed with an industry overseer over the last five years, with employees leaving the company in connection with its sales scandal.

When brokers and certain other registered representatives leave a bank, the lender is required to file a notice with the Financial Industry Regulatory Authority, known as Finra. The so called ''U5'' form includes a field where the bank must disclose any allegations that impacted the employee's departure.

A negative comment on a U5 amounts to a stigma that makes it impossible to find another job in the banking field.

''It's like being blackballed,'' said Marc Schifanelli, a lawyer who specialises in Finra arbitration. ''It can be a showstopper for a career.''

According to a number of former employees, Wells Fargo used that power to hit back against those who tried to expose the bank's fraudulent activities (See: Fake accounts scandal forces Wells Fargo chief John Stumpf to step down)  

To investigate these claims, three Democratic senators asked Finra for data on Wells Fargo's U5 filings and the responses they received ''paint a disturbing picture,'' according to the senators who wrote to Timothy J Sloan, Wells Fargo's chief executive, on Thursday

In the letter Thursday, Elizabeth Warren, Massachusetts lawmaker and two other Democrats asked whether the bank filed inaccurate reports to the Finra. 

''Currently available information suggests that the bank may have filed defamatory statements to retaliate against employees who questioned aggressive cross-selling practices and that those negative statements often dealt serious blows to the employees' careers," the senators wrote.

''If Wells Fargo submitted false or incomplete information about the fired employees in its mandatory disclosures to Finra, the bank may have violated Finra rules and misled regulators about the scope of the fraud,"  they added.