More bad news for scandal-plagued Wells Fargo: The banking giant is shelling out $9.5 million to settle allegations that it wasn’t paying financial advisors their commissions in a timely manner or reimbursing them for expenses.
Nearly 2,200 current and former reps will receive an average of $2,783 apiece, according to Financial Advisor IQ.
The advisors first filed a lawsuit against the bank in 2014, according to a report by Financial Advisor IQ. The suit asserted that Wells Fargo broke California labor laws in its payment practices.
The bank pays its advisors every two weeks, with the second monthly check including commission the advisor earned the previous month, according to Financial Advisor IQ.
“Wells Fargo contends that this timing is lawful, because the wages are paid in the pay period following that in which they are earned and that it would be administratively impractical to pay the amounts sooner,” the settlement document said. “Wells Fargo further contends that financial advisors have the option to receive payments in advance of this pay schedule based on estimates, and relatively few financial advisors select this option.”
But the advisors said that the practice delayed their pay unfairly, Financial Advisor IQ reported.
The settlement is the latest in a string of bad publicity for the bank. The Labor Department is currently investigating the bank for allegedly pressuring customers to enroll in high-cost individual retirement accounts. Wells Fargo was also recently fined $1 billion for its mortgage and auto insurance practices. It’s also been repeatedly sued for discriminatory lending and accused of retaliating against whistleblowers. Its troubles kicked off in late 2016, when it was revealed that employees of the bank had opened as many as 3.5 million unauthorized customer accounts.