Wells Fargo WFC 0.03% & Co. has fired or suspended more than a dozen employees in its investment bank and is investigating dozens of others over alleged violations of the company’s expense policy regarding after-hours meals, according to people familiar with the matter.
At issue is whether Wells Fargo employees ranging from analysts to managing directors in New York, San Francisco and Charlotte, N.C., doctored receipts on dinners that they charged to the bank, the people said.
“We became aware that certain Wells Fargo Securities team members were not complying with the after-hours meals reimbursement policies after they were brought to the attention of our leaders by concerned team members,” a Wells Fargo spokeswoman said in a statement. “We took action to address the issue and we continue to investigate the matter.”
Wells Fargo, like other big banks, reimburses staffers for food that they order when they have to stay late at the office to work on deals and other assignments for clients.
In recent months, however, executives within the investment-bank division, which is known as Wells Fargo Securities, learned that some employees regularly placed dinner orders through delivery services like Grubhub Inc.’s Seamless or Square Inc.’s Caviar earlier than the policy allowed, the people said. Later, employees allegedly altered the time stamps on emailed receipts to make their meals eligible for reimbursement, these people added.
That discovery kicked off an internal review into months of expense filings that resulted in employees being fired or placed on administrative leave and that caused a delay in bonuses that were due to analysts earlier this summer, the people said. Since May, at least nine Wells Fargo analysts and associates have been terminated or have resigned voluntarily after the bank alleged they altered their meal receipts, according to a review of Financial Industry Regulatory Authority records. Banks generally have 30 days to update Finra records.
Wells Fargo has faced a spate of issues since a sales-practices scandal erupted at the company in 2016. The bank’s problems across many of its major business lines prompted the Federal Reserve to limit its growth, and it is currently under investigation for a range of problems including improper customer charges by the Justice Department, Securities and Exchange Commission and other state and federal entities. The bank has said it is cooperating with the probes.
At the same time, Wells Fargo is in the midst of a firmwide expense-cutting plan, aiming to trim $4 billion by the end of 2019. The company also is integrating its corporate- and investment-banking arms, a process that has led to layoffs, people familiar with the plans have said.
The investigation into altered meal receipts started with relatively junior analysts and associates in the investment bank’s San Francisco office and broadened from there, according to people familiar with the matter.
A majority of the junior staffers in that office left the bank or were suspended following the review, some of the people said.
The bank is investigating any policy infraction, including expensing dinner ordered before the typical 6:30 p.m. cutoff but not doctoring receipts, some of the people familiar with the matter said. The severe punishments for policy infractions have caused some inside Wells Fargo to question whether the consequences are too harsh given Wells Fargo’s other woes, these people say.
Wells Fargo isn’t the only financial firm that is punishing employees alleged to have abused company expense policies. Fidelity Investments fired or allowed more than 200 employees to resign over accusations of widespread violations of the money manager’s computer-buying and physical-fitness benefit programs, the Journal reported in May. At the time, a spokesman for Fidelity said the company took “appropriate action” and that no customers were involved or affected.
Top executives of Wells Fargo Securities earlier this month sent a note to employees clarifying the bank’s policies and spelling out the specific time when meals could be expensed, according to the memo, which was described to the Journal.
—Gregory Zuckerman contributed to this article.