Wells Fargo Red-Faced Over Massive Data Breach
Regulators are probing Wells Fargo over the apparent accidental release of private data on around 50,000 of its wealth management clients, as well as compensation of the company’s financial advisors, Bloomberg writes.
Earlier this month a lawyer for the bank allegedly sent confidential information primarily on wealthy Wells Fargo Advisors clients to a lawyer for Gary Sinderbrand, a former Wells Fargo Advisors rep involved in a defamation suit against an employee of the bank, the New York Times reports.
The data came in response to Sinderbrand’s lawyer’s subpoena of the bank for documents and emails, according to the paper. Instead, Angela Turiano, a lawyer with Bressler, Amery & Ross, which had been hired by Wells Fargo for the suit, sent Sinderbrand 1.4 gigabytes of data that included clients’ names, Social Security numbers, value of assets under management, portfolio performance and fees paid to Wells Fargo, the Times writes.
In addition, the files sent included data on an unspecified number of Wells Fargo’s financial advisors, including their compensation, performance and client lists, according to the paper. Sinderbrand tells the Times there was no reason to include such information for the purposes of the subpoena, which is part of a defamation lawsuit against Sinderbrand’s brother who still works at Wells Fargo, the Times writes.
A spokeswoman for Wells Fargo Advisors tells the paper that the company is investigating the matter.
Turiano and a spokeswoman for her law firm didn’t respond to the Times’ requests for comment.
Sinderbrand had served as a financial advisor at Wells Fargo until 2013 and then reached a compensation-related settlement with the bank in 2016, according to the paper. Later, Sinderbrand sued Wells Fargo over alleged violations of a confidentiality clause in the compensation settlement, the Times writes. That suit is still pending, according to the paper.
Sinderbrand had joined Wells Fargo Advisors in 2008 after a five-year stint at UBS, according to his BrokerCheck profile. Prior to UBS, Sinderbrand worked at Merrill Lynch for 20 years, according to BrokerCheck.
Regulators, meanwhile, have started a probe into the data breach, Bloomberg writes. Finra has informally contacted one of the lawyers involved in the breach, a person with knowledge of the matter tells the newswire. And Wells Fargo lawyers are in the process of contacting regulators as well, another person with knowledge of the matter tells Bloomberg. A spokesman for Finra, however, did not provide comment to the news service. A spokeswoman for the SEC, meanwhile, declined comment to Bloomberg, and representatives for the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency didn’t respond to the news service’s requests for comments.
The data breach comes less than a year after revelations that Wells Fargo’s bank employees opened up to two million bogus debit and credit accounts — allegations which led to a $185 million fine. Wells Fargo Advisors reps, meanwhile, have apparently felt fallout from the scandal.