Mike Roemer, chief compliance officer of Wells Fargo & Company.

 

By Sue Reisinger

Awash in scandal, Wells Fargo & Co. has named Michael Roemer, former group head of compliance for Barclays bank, as its new chief compliance officer.

In the most recent probe, the Financial Industry Regulatory Authority announced today that it has ordered Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network to pay more than $3.4 million in restitution to customers who were sold unsuitable products. FINRA said between July 2010 and May 2012 Wells Fargo sold the customers volatile products meant for short-term investment but wrongly represented the products as long-term hedges against a market downturn.

On Friday,  it reported third quarter revenue at least 2 percent below the same quarter a year ago in a U.S. Securities and Exchange Commission filing. The bank also cited $1.3 billion in operating losses, of which $1 billion was for litigation costs. On June 30, Wells Fargo estimated its potential losses due to legal actions at about $3.3 billion, in a filing with the SEC.

Roemer will join the bank in January and be based in San Francisco, the bank announced Thursday.  Barclays had hired Roemer, a 27-year veteran in the financial services industry, in 2012 to help it with compliance reforms after investigations of its own banking problems, including its LIBOR scandal.

“Wells Fargo is committed to maintaining a strong compliance program,” said a statement from Wells Fargo CEO Tim Sloan. “Hiring a leader with Mike's credentials is an important step in our commitment to building a stronger compliance function and a better Wells Fargo.”

Roemer will report to Mike Loughlin, Wells Fargo's chief risk officer and head of corporate risk. A statement from Loughlin said, “The current regulatory environment demands strong compliance leadership and Mike's extensive compliance experience, particularly at a globally systemic important bank, is a welcome addition.”

Before joining Barclays, Roemer also worked as chief auditor with the CIT Group, and spent 23 years at JPMorgan Chase & Co. and predecessor organizations in various roles. While at U.K.-based Barclays, Roemer helped establish the compliance career academy in conjunction with the Judge Business School at Cambridge University.

Wells Fargo has been stung in the past year by a series of state and federal investigations, most notably for opening some 3.5 million fake accounts without its customers' knowledge. More recently it has been accused of forcing hundreds of thousands of borrowers into buying unneeded auto insurance, and of collecting millions of dollars of inappropriate mortgage fees from borrowers.

Susan Schroeder, executive vice president of FINRA's Department of Enforcement, said of Monday's settlement that “FINRA seeks restitution when customers have been harmed by a member firm's misconduct.”

In an effort to turn around its legal woes, the bank hired Allen Parker in March as general counsel from Cravath, Swaine & Moore.

Contact the reporter Sue Reisinger at [email protected]; Twitter: @sreisinger.

Mike Roemer, chief compliance officer of Wells Fargo & Company.

 

By Sue Reisinger

Awash in scandal, Wells Fargo & Co. has named Michael Roemer, former group head of compliance for Barclays bank, as its new chief compliance officer.

In the most recent probe, the Financial Industry Regulatory Authority announced today that it has ordered Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network to pay more than $3.4 million in restitution to customers who were sold unsuitable products. FINRA said between July 2010 and May 2012 Wells Fargo sold the customers volatile products meant for short-term investment but wrongly represented the products as long-term hedges against a market downturn.

On Friday,  it reported third quarter revenue at least 2 percent below the same quarter a year ago in a U.S. Securities and Exchange Commission filing. The bank also cited $1.3 billion in operating losses, of which $1 billion was for litigation costs. On June 30, Wells Fargo estimated its potential losses due to legal actions at about $3.3 billion, in a filing with the SEC.

Roemer will join the bank in January and be based in San Francisco, the bank announced Thursday.  Barclays had hired Roemer, a 27-year veteran in the financial services industry, in 2012 to help it with compliance reforms after investigations of its own banking problems, including its LIBOR scandal.

“Wells Fargo is committed to maintaining a strong compliance program,” said a statement from Wells Fargo CEO Tim Sloan. “Hiring a leader with Mike's credentials is an important step in our commitment to building a stronger compliance function and a better Wells Fargo.”

Roemer will report to Mike Loughlin, Wells Fargo's chief risk officer and head of corporate risk. A statement from Loughlin said, “The current regulatory environment demands strong compliance leadership and Mike's extensive compliance experience, particularly at a globally systemic important bank, is a welcome addition.”

Before joining Barclays, Roemer also worked as chief auditor with the CIT Group, and spent 23 years at JPMorgan Chase & Co. and predecessor organizations in various roles. While at U.K.-based Barclays, Roemer helped establish the compliance career academy in conjunction with the Judge Business School at Cambridge University.

Wells Fargo has been stung in the past year by a series of state and federal investigations, most notably for opening some 3.5 million fake accounts without its customers' knowledge. More recently it has been accused of forcing hundreds of thousands of borrowers into buying unneeded auto insurance, and of collecting millions of dollars of inappropriate mortgage fees from borrowers.

Susan Schroeder, executive vice president of FINRA's Department of Enforcement, said of Monday's settlement that “FINRA seeks restitution when customers have been harmed by a member firm's misconduct.”

In an effort to turn around its legal woes, the bank hired Allen Parker in March as general counsel from Cravath, Swaine & Moore.

Contact the reporter Sue Reisinger at [email protected]; Twitter: @sreisinger.