This is likely not the way that national banking conglomerate Wells Fargo wanted to ring in the New Year.
In lieu of positive business tidings and reassurances of an upbeat 2017, what the company received recently was even more bad news surrounding its business policies and practices, following upon last year’s bombshell stories regarding hard-sale tactics to consumers.
And, once again, that news prominently featured in national media outlets.
Its bottom line: Allegations of many African American advisers that Wells Fargo Advisors (an arm of the parent company) has systematically engaged in company behavior that discriminates against them based on their race have resulted in a mass payout by the company.
Specifically, the amount is $35.5 million, which Wells Fargo reportedly agreed to pay in a settlement the company recently reached with plaintiffs in a federal class action lawsuit.
Although the bank cites disagreement with the plaintiffs’ claims (it states that it is settling “in the best interests of our team members, clients and investors”), the plaintiffs point to a long and unchecked company history of denying African American brokers comparatively attractive employment opportunities that have been reserved for workers of other races.
Other actors in the brokerage industry have been similarly targeted by employees in recent years, as well. Merrill Lynch was tagged for a $160 million settlement in 2013.
The Wells Fargo agreement covers every African American adviser who has been with the company at any time from September 2009 to the end of 2016. The settlement amount is currently pending, requiring the endorsement of the federal judge who is overseeing the matter before it takes legal effect.