Wells Fargo (NYSE: WFC) has fired over 100 employees suspected of fraudulent filings with the Small Business Administration for coronavirus pandemic relief. An internal investigation at the bank is ongoing, but it is currently unknown if authorities have launched investigations against the former employees.
Initial news of the firings came from an anonymous source that spoke to Bloomberg, which was followed up by a memo from Wells Fargo to various news outlets, including CBS and NPR. According to reports, the company noticed suspicious activities and began investigating employees, eventually firing those who had allegedly engaged in fraud.
"We have terminated the employment of those individuals and will cooperate fully with law enforcement. These wrongful actions were personal actions, and do not involve our customers," said Wells Fargo HR Head David Galloreese. "We have zero tolerance for fraudulent behavior and will continue to look into these matters. If we identify additional wrongdoing by employees, we will take appropriate action."
According to reports, an internal investigation is currently ongoing at Wells Fargo, likely to follow up on recently fired employees' activities and to identify any others committing fraud. Galloreese stated that Wells Fargo would cooperate fully with authorities, though there was no word if the federal government had gotten involved at the time of writing.
The alleged fraud had to do with the Economic Injury Disaster Loan program, which the Small Business Association launched to help businesses struggling amid the Coronavirus pandemic. Concerns of fraud in the SBA's program have been widespread, and concerns are not at all unfounded. JPMorgan Chase (NYSE: JPM) found similar fraud being conducted by some of its employees.
The news was the likely catalyst to Wells Fargo's disappointing day at the NYSE on Thursday. On Thursday, in the hours before the news went public, Wells Fargo's shares lost 4.2% of their value before market close. The initial round of news of the firings, which began after 5 p.m., may have contributed to Wells Fargo's after-close slump of .9%. Shares fluctuated throughout trading on Thursday but ended the day .5% down.