Wells Fargo is under criminal investigation after the bank’s managers were accused of conducting fake interviews with minority and female candidates for positions that were already filled in order to boost the bank’s diversity statistics.
The investigation is being led by the new civil rights unit within the criminal division of the Manhattan District Attorney’s office.
The new unit was started by Damian Williams, US Attorney for the Southern District of New York.
The investigation comes a month after a New York Times report in which former bank employees came forward, claiming they were instructed by superiors to conduct interviews with black applicants despite someone already being chosen for the jobs.
Former Wells Fargo wealth management executive Joe Bruno, 58, told the Times he was fired last August after reporting to his bosses about the bank’s alleged ‘fake interviews’, which he described as ‘inappropriate, morally wrong, ethically wrong’.
Bruno claimed that he was instructed to conduct interviews with black candidates for the lowest-paid financial advisor and financial advisor positions, despite the fact that he or his superiors had already chosen someone for that job.
Bruno told the Times that at one point he refused to do the interviews, telling his bosses, ‘I’ve got a black man across the table who has no chance of getting the job’ and says he was fired in retaliation for speaking out.
Former Wells Fargo wealth management executive Joe Bruno, 58, (left) claims he was fired after reporting to his bosses about the bank’s ‘fake interviews’. The investigation is being led by the new civil rights unit within the office started by Damian Williams (right), the U.S. Attorney for the Southern District of New York.
Manhattan federal prosecutors have launched a criminal investigation into Wells Fargo to determine whether the bank’s hiring practices violated the law.
The New York Times reports that there are no apparent charges under consideration at this time, but the investigation signals a federal willingness to use criminal law to resolve matters that may have been treated as civil matters in the past.
Bruno is just one of seven current and former Wells Fargo employees who say their bosses at the wealth management unit instructed them to interview so-called ‘diverse’ candidates for positions that had already been filled by another candidate.
Five other people also came forward and said they were aware of the practice or participated in arranging the interviews, the Times reported last month.
According to the employees, some of whom remained anonymous for fear of losing their jobs, the interviews were a ploy to increase the bank’s diversity efforts in anticipation of potential regulatory audits rather than actually diversifying the bank’s workforce.
The allegations come two years after CEO Charles W. Scharf vowed to increase diversity following the murder of George Floyd in June 2020.
The bank adopted a formal policy that required multiple candidates to be interviewed for any open positions earning more than $100,000 a year.
On Monday, the bank’s CEO Charles W. Scharf announced that Wells Fargo would discontinue its diversity hiring policy to implement changes.
Wells Fargo spokeswoman Raschelle Burton also denied the false interview claims, telling the Times in an emailed statement: “To the extent that individual employees are engaging in the behavior described by The New York Times, there is no we tolerate it”.
Burton says that in 2020 the bank hired nearly 26,000 people and 77% of them were non-white men, and that 81% of the 30,000 new hires in 2021 were non-white men.
On Monday, the bank’s CEO Charles W. Scharf (pictured) announced that Wells Fargo would discontinue its diversity hiring policy to implement changes.
She did not specify what percentage of those new hires were for jobs that paid more than $100,000.
The bank has been in legal trouble over diversity before.
In August 2020, the bank paid an $8 million settlement to the Department of Labor for allegedly discriminating against more than 30,000 black applicants for banking, sales and support roles at the bank.
Prior to that, the bank was forced to settle a racial discrimination class action in 2017, paying $36 million to 320 black financial advisers who claimed they had not had the opportunity to win new clients or partner with white financial advisers.
Following the agreement, the bank pledged to ‘take actions aimed at increasing employment, earnings and promotion opportunities for African-American financial advisors and financial advisor trainees’, as well as adopting an unofficial policy of interviewing at least one woman or person of color for every open job, Burton said.