George Hartzman's complaint to the North Carolina Securities Division concerns alleged misbehavior by his employer, Wells Fargo, and "and other firms doing or that did the same," which is to say pretty much the whole TBTF industry.

Hartzman works for Wells Fargo Advisors, where he arrived with the acquisition of Wachovia Securities. He also teaches continuing education classes for CPAs, including a unit on ethics, and is visible around town as a blogger and frequent speaker from the floor at City Council and other meetings.

Hartzman is sharing his story far and wide. I've contacted Wells Fargo Advisors and the NCSD for comment. 

Hartzman claims that brokers at Wells Fargo and/or Wachovia were required to create financial plans for well-to-do customers in order to qualify for a bonus. He says the projected returns in these plans could be presented without showing investment costs that would reduce those returns substantially over time, and that in certain cases that omission was in violation of law, including Sarbanes-Oxley. "If Investment costs are not included in Envision investment plans, the proposals are inaccurate and misleading," he told the Securities Division.  

His other issue involves the secret loan program to big banks from the Fed. Hartzman contends that senior execs and auditors who knew about these loans and yet allowed brokers at their firms to give financial advice without sharing that knowledge were in violation of the law, too. 

Hartzman seems to be cognizant of the risks he is taking by going public with these allegations against the company that signs his paycheck. Whether or not his charges prove to carry legal weight, he's put himself in potential jeopardy for what he believes is right.

Comments

[Ron]

Agreed. If Hartzman is not careful he could get sued. Its an uphill battle fighting these big financial institutions.

[hartzman]

Still employed as of this afternoon. Had to cancel this months cpa ethics clases.

[polifrog]

Thanks for the synopsis, Ed.

[hartzman]

The straw was the late november article by bloomberg reporting he money made from secret loans that were undisclosed to thoee managing fiduciary accounts.

[Billy Jones]

We can only hope for the best. As one who once blew the whistle on one far smaller that Wells Fargo and for much lesser crimes it's not something I would want to wish on anybody. I never recovered, I hope things go better for George.

[Hugh]

George, Isn't it a violation of Wells' privacy policy to publicly post an internal company email?

[Hartzman]

"Isn't it a violation of Wells' privacy policy
to publicly post an internal company email?"

Good point Hugh.

The problem is the reglatory infrastruture
seems to have been compromised.

I was left without a resonable choice.

If I had done nothing,
teaching CPA and Attorney ethics courses while doing nothing,
would make me into an amazing fraud to myself.

As of Friday close, I still have a job.

Monday might be different.

They asked me to cancel this month's ethics classes,
so I did.

The internal email exposure
contrasts with whistleblower law.

Seems like a wash,
unless I get canned on Monday.

Great question.

[SAL LEONE]

Good luck George, I know it took a lot to stand up because I been there.

Just watch your back at work and document everything. I am sure they will begin to harass you.

[hartzman]

Thanks.

[hartzman]

I very love my wife. She is a bit more than a little upset at the moment. I f i were her i would be too. Hurting her is more painfull than fighting the rest of humanity.

[hartzman]

I very love my wife. She is a bit more than a little upset at the moment. I f i were her i would be too. Hurting her is more painfull than fighting the rest of humanity. Gh

[hartzman]

I have asked to be seated as a board member of wells fargo.

[hartzman]

My parents just saw thier first youtube videos of me.

[Hartzman]

"Isn't it a violation of Wells' privacy policy
to publicly post an internal company email?"

I believe the fiduciary standard overides the privacy policy
if I am doing what is in the best interests of my clients,
which I believe I am doing.

The ethics code and the law
point to my obligation to point it out,
and if the regulatory infrastructure has been compromised,
which I believe it has been,
then I feel justified to take it public.

KPMG is the auditor.

How did the bank analysts not know?

How could the auditors not have known?

If some knew and profited while most remained unaware,
how is that not insider trading
on the stock option grants and the TARP payoff?

If they knew what they were getting,
how could they not have correctly assumed others were doing the same?

If some knew that most big banks were getting
what appears to have been and unlimited line of credit
while most didn't,
how can that not be a violation of multiple laws, ethics codes
industry best practice no no's etc...?

[Hartzman]

Why would some not want to include investment costs in financial planning software used to council financial clients?

http://hartzman.blogspot.com/2012/06/why-would-some-not-want-to-include.html

[Hartzman]

"Abner Doon (George Hartzman) are you still employed by Wells Fargo?

If you are, my guess is that you won't be very much longer.

It's your "mouth," you know.

You are so, so disgusting."

http://hartzman.blogspot.com/2012/06/abner-doon-george-hartzman-are-you.html