Search Site
Menu
Wells Fargo Must Pay $14.5 Million After Violating Swap Dealer Business Conduct Rules

The U.S. Commodities Futures Trading Commission (CFTC) recently ordered Wells Fargo Bank to pay $14.5 million as a result of multiple violations of swap dealer business conduct standards.

According to the CFTC, Wells Fargo “failed to deal with a counterparty in a fair and balanced manner based on principles of fair dealing and good faith,” and “also failed to implement and monitor systems to ensure compliance with policies and procedures regarding communicating with counterparties in a fair and balanced manner.”

The penalty includes a civil fine of $10 million, with the remainder being restitution of money lost as a result of Wells Fargo’s actions. The CFTC also issued a cease and desist order to Wells Fargo to stop violating the commission’s business conduct standards.

Case background

The case has its roots going back to August 27, 2014, when Wells Fargo entered into a foreign exchange forward contract with another party to exchange $4 billion American for $4.347 Canadian. This exchange was to be priced at the weighted average spot rate of the Canadian dollars Wells Fargo acquired in the spot market, with an adjustment added.

Employees of Wells Fargo were aware at the time that the deal would require the bank to give a weighted average rate based on spot trades that actually occurred. However, the bank did not have any system in place that would accurately track trades that were used to fill the other party’s order. This meant the bank did not properly communicate relevant information about the transaction in a manner that could be considered “fair and balanced” for these purposes.

For example, instead of calculating the weighted average price (which is what had been agreed), Wells Fargo picked a rate it thought would be within range of the true weighted average, which would make it acceptable to the other party.

The lawsuit also alleged that for a period of nearly four years between August 2014 and May 2018, Wells Fargo did not implement or monitor policies that would have prevented such communication failures from happening again.

For more information about filing a whistleblower claim with the CFTC, contact an experienced whistleblower lawyer at Kardell Law Group.

Honors
Our Office
  • Dallas Office
    4514 Cole Ave
    #600
    Dallas, Texas 75205
    Phone: 214-306-8045
    Fax: 469-729-9926
Testimonials
  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Incredible knowledge of employee related concerns and equally brilliant knowledge of health care regulations, standards of practice. I would recommend this firm to anyone."  -V.B.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.

FOLLOW US
Facebook Twitter Linkedin RSS Feed JD Supra