Blog: Wells Fargo Whistleblower Ville-Valtteri Helenius – Whistleblowers Protection Blog

Ville-Valtteri Helenius was born in Kokkola, Finland, to a father who worked in forestry (and taught at the local college) and a mother who was a housewife and nurse. His mother was a Christian who taught Helenius and his brother “to be honest, straightforward and to stand up for the right thing.” With his mother and father in education and healthcare, they strived to instill in their children good values, and to “do good stuff in the world.”

In 1985, Helenius’ father was invited to work in Africa, and his family moved to Kenya where his father developed programs in forestry. Helenius lived in Africa from 1985 until 1994, finishing his A levels (high school) there. Helenius went to Oxford to study, the first student at Oxford from Botswana, and the first Finnish student to attend since 1263. He pursued a degree in engineering, and transferred to University College London (UCl), graduating with a Master’s degree in Electronics in 2001. While at UCI, Helenius created the first student FM radio station.

“Engineering is about solving problems, and in banking you have to solve problems,” so Helenius took an offer from Deutsche Bank in order to stay in London. He started in the IT department doing coding, and then was placed in program management. In 2005 Helenius was offered a position at Bank of America as a project program manager in risk management. Helenius started working on his MBA from Columbia University and London Business School. He graduated in 2008 and found employment at Deloitte. Deloitte described Helenius as “the best guy that they had.”

Helenius started his own consulting business, Simbalite Limited, in 2011 and he worked with various clients and various projects. In October 2018, Wells Fargo hired Helenius through Phyton (a recruitment agency headquartered in New York) as a Program Director, tasked with working on the regulatory programs and making the bank compliant. Specifically, Helenius was to make sure Wells Fargo adhered to the Markets in Financial Instruments Directive (MiFID), which went into effect in November 2007.

From 2007-2008 the world suffered a global financial crisis, a worldwide economic crisis the most severe since the Great Depression, and MiFID was the legislative framework instituted by the European Union (EU) to regulate financial markets in the EU. MiFID standardized banking practices and restored confidence in the financial industry. On January 3, 2018, MiFID II was instituted and it expanded legislation to cover virtually every asset and profession within the EU financial services industry. MiFID II covered all bankers, traders, fund managers, exchange officials and brokers and they had to abide by MiFID II regulations. It also placed restrictions on inducements paid to investment firms or financial advisors by any third party in relation to services provided to clients. Banks and brokerages could no longer charge for research and transactions in a single bundle, forcing a clearer picture of the cost of each and improving the quality of research available to investors. Helenius was hired by Wells Fargo to fix gaps with the compliance aspect of MiFID II, because Wells Fargo operated within the EU.

Wells Fargo is the fourth largest bank in the United States, based in San Francisco, with a designation as one of the “Big Four Banks” of the United States. It has 8,050 branches and 13,000 ATMs with $1.9 trillion in assets. In 2016, Wells Fargo created millions of fraudulent savings and checking accounts with Wells Fargo clients without their consent, which became widely known after various regulatory bodies fined the company $185 million due to the illegal activity. By the end of 2018, the civil and criminal suits against Wells Fargo reached an estimated $2.7 billion dollars. Legal and financial ramifications for Wells Fargo continued with new allegations of signing up customers for auto insurance policies without their knowledge. Wells Fargo paid a billion dollar fine, and hoped to revamp their company by launching a marketing campaign that was intended to rebuild customer trust by presenting television commercials noting their origins in the Old West. It is interesting to note that CEO Tim Sloan noted in 2017 that he did not feel that the “culture of Wells Fargo needed to be changed.” In 2019 Charlie Scharf took the CEO position, bringing with his experience from JPMorgan. Another investigation regarding the sales practices by Wells Fargo financial advisors was opened in 2019 regarding their wealth management business.

With the wide range of experience Helenius brought to Wells Fargo as a Program Manager in making sure Wells Fargo was compliant with MiFid II, it did not take long for him to discover that Wells Fargo was not in compliance. He found that Wells Fargo was “pretending to comply, and in the case of the MiFid program they spent about five million dollars with a Chicago based consultancy and only papered it as complied, but they did not actually comply.” Helenius advised, “Wells Fargo had covered up a whole bunch of things claiming that it was done, when it wasn’t.”

Helenius discussed issues with compliance officers at Wells Fargo. One issue of non-compliance by Wells Fargo was linking their servers to a GPS clock. This was done to make sure that a continuous tape of time stamps for purposes of transparency in financial transactions was available. Wells Fargo had not implemented this, in violation of MiFID. Helenius told Wells Fargo compliance officials it was an issue, and they responded by asking him if he was sure he wanted to pursue the issue because when they had asked about it with management, they were told “not to talk about it, and literally to shut up and everything was fine.”

Helenius, as his job demanded, was a “change agent” and listed 29 areas of non-compliance by Wells Fargo that were discussed at “the most senior level and escalated up.”

Included in Helenius’s whistleblowing claims was that Wells Fargo was avoiding paying the Value Added Tax (VAT) to the European Union by listing the salaries of employees through a United States entity, certainly tax fraud. Helenius noted that the U.K. entity of Wells Fargo was barely solvent and booking costs against the parent company in the U.S., making the U.K. bank more solvent than it was, a transfer pricing fraud.

Helenius brought the transfer pricing fraud to the attention of a Wells Fargo CPA manager in the US, “and this was acted upon.” Shortly afterwards, Helenius discovered that management at Wells Fargo noted he was a whistleblower that they had to remove.

Helenius also found that Wells Fargo was not following execution and trading rules. Execution and research must be charged separately by a bank, otherwise it can be an inducement or bribe to the client. Helenius noted that “Wells Fargo has a Research Department that costs them roughly $200 million a year, and let’s say a third of that relates to Wells Fargo European client activity, so roughly we are talking $65 million dollars a year that they should be collecting from the clients, because if you do not collect that money from the clients, you are providing an advantage or inducing the client by providing a free service.” European legislation prevents bundling of research and trading because it was seen as a conflict of interest.

The initial reaction, according to Helenius from Wells Fargo, was that they intended to do something about the non-compliance issues, with contact established with the Financial Conduct Authority (FCA), an independent financial regulator accountable to the UK Treasury and Parliament. The FCA notified Wells Fargo that they needed more information, which Wells Fargo could not, or would not respond to. The FCA then wrote another communication which advised Wells Fargo that their non-response was totally unacceptable.

Wells Fargo then removed Helenius from any further conversations with FCA, and according to Helenius, “they lawyered up, and then pretended that they took corrective action”. Before Helenius blew the whistle, his manager told him he was the best thing that happened to Wells Fargo in London, that “he was a really really good guy.”

In mid-2019, Wells Fargo got very aggressive with Helenius, circulating false emails about him, accusing him of things he did not do, and started investigations which were found to be untrue. For six months, Helenius put up with the abuse until the 3rd of December 2019 when he was threatened in a meeting. Helenius left the bank to deal with the health issues that occurred due to the abuse on the job, and discovered when he tried to return to work that he had been fired.

Subsequently, Helenius recorded a phone conversation with Alicia Reyes, a chief executive at Wells Fargo, who advised him “It’s [Wells Fargo] like a mafia, literally. This place is just a scheme. There’s no intention of actually solving problems or building things. There’s just smoke and mirrors and a coverup.” Reyes left Wells Fargo after Helenius because she did not agree with the way the bank operated. She felt the bank did many things on the wrong side of regulation. Reyes told Helenius “You had subject matter expertise and we were trying to solve the problems and you were helping, you had subject matter expertise and we were trying to solve it, but there was no intention (by Wells Fargo).” She told Helenius that Wells Fargo had said, “Wait a minute, we have a potential whistleblower here and we need to take him out. It’s a kill-the- messenger culture.”

In June of 2021, Helenius’s retaliation case was heard by the U.K. Employment Tribunal. The judgement noted that Helenius’ claims that he was subjected to detriments for having made protected disclosures were not “well-founded” and dismissed. A reading of the judgement reveals a definite bias against the whistleblower, as it notes that the whistleblower had complaints that he “ruffled feathers or was not as diplomatic as he should be.” It was noted that Wells Fargo included certain allegations against Helenius that were totally false, but that Wells Fargo had circulated them among employees. Although the tribunal ruled that Helenius made protected disclosures, they felt that Helenius had not established a link between his whistle blowing and the “detriments” he claimed he suffered.

Mary Robinson, a member of Parliament and chair of the All-Party Parliamentary Group on Whistleblowing issued a statement on September 9, 2021 where she took the FCA to task. She said: “There is apparently a disconnect between the regulator and the legal process.” Robinson noted that she was concerned that the criticism of Wells Fargo contained in the Employment Tribunal would not reach the ears of regulators of the bank because the FCA only requires that they be contacted concerning banks when the bank loses a whistleblowing case. The judge in the Tribunal noted that Wells Fargo had presented allegations about Helenius that were untrue, and noted the bank attempted to discredit Helenius and prejudice the tribunal. Although the tribunal found that Helenius had made three protected disclosures, they ruled the retaliation he endured was unrelated to the whistleblowing.

The All-Party Parliamentary Group on Whistleblowing is working to create an Office of the Whistleblower. The office would direct the FCA to consider judicial criticism of a bank’s behavior even if they win at the tribunal level. Helenius has found support with WhistleblowersUK and currently continues working at his consulting business.

The plight of whistleblowers is the same everywhere in the world. The UK believes that whistleblowers should come forward with no “bounty” involved and blow the whistle for the common good. However the reality is whistleblowers are forced out of their chosen industry, ridiculed by their peers, management and experts. Counter claims are made against the whistleblower with accusations of wrongdoing leveled against them. Many whistleblowers become unemployable and pay a heavy price for telling the truth. Helenius suffered it all.

In some parts of the world, telling the truth can cost you your life. The world is neither kind nor fair to whistleblowers, but in their passionate pursuit of justice the whistleblower becomes ethereality, almost too good for this world. Whistleblowing is good for the public, and should be actively encouraged. Ville-Valtteri Helenius accomplished what he was raised to do, he was honest, straightforward and did the right thing, he did “good stuff” in this world.

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