It’s become well known in recent weeks that Wells Fargo’s aggressive campaign to increase accounts put undue pressure on its workers that led to repeated violations of labor law while the financial giant raked in huge profits.
But even with that revelation, workers are still paying a price. And the public could too if people believe the scandal stops here. While the U.S. Department of Labor announced last month it would initiate a “top to bottom” probe of Wells Fargo due to the alleged wage and work-hour violations that took place at the company, a new lawsuit claims employees are still suffering their own financial consequences.
A federal lawsuit filed in Minnesota claims the scandal is threatening the retirement of hundreds of thousands of current and former employees. Why? Because senior executives continued to tie retirement plans to Wells Fargo stock prices even as they sold off their personal company stock as the share price tanked in the wake of news of the bank’s alleged practices.
While that is undoubtedly bad news for those who have worked at Wells Fargo, financial firms’ malfeasance doesn’t necessarily end there. In fact, there are other instances of some of the nation’s largest private equity firms putting their own bottom lines before that of their customers.
As noted in The New York Times last week, “Consider a case involving Apollo Global Management, the private equity giant overseen by Leon Black. In late August, the Securities and Exchange Commission brought an enforcement action against the firm, contending that it had breached its fiduciary duty to investors by not disclosing specifics on fees it was extracting. The suit followed other improper fee cases filed by the S.E.C. against the Blackstone Group and KKR.
“In settling the case, Apollo agreed to return fees of $40.3 million to clients. By contrast, Wells Fargo returned improper fees of $2.6 million.”
But while some pension funds have pulled investments with Wells Fargo, that hasn’t happened with Apollo. And the retirements of many could hurt because of it. All bad actors must be held accountable. Those who invest in their futures shouldn’t be taken to the poor house by Wall Street.