Prudential Fires Back Against Three Former Employees

By Leslie Scism

Prudential Financial Inc. on Wednesday said three former employees who accused Wells Fargo & Co. and the insurance firm of fraudulent life-insurance sales tactics were fired for degrading statements about co-workers, according to court documents.

The three former Prudential employees sued the insurance company last month alleging wrongful dismissal. Their suit was the latest twist in a sales-tactics scandal at Wells Fargo that has already forced the bank to pay a $185 million settlement over opening as many as 2.1 million accounts using fictitious or unauthorized information.

That wrongful-dismissal suit, filed in a state court in New Jersey, alleged that some of the same sales tactics may have occurred with Prudential life-insurance policies sold through self-service kiosks in Wells Fargo branches and on the bank's website. Last month, Prudential suspended distribution of the policies through the bank.

The three fired employees worked in Prudential's "Corporate Investigations Department," which examines fraud against the company and internal allegations of fraud. They were part of a Prudential group reviewing whether Wells Fargo employees had signed up customers for insurance without their knowledge, according to their account and Prudential's filing.

In their lawsuit, the three allege they were dismissed for pushing for a more-aggressive approach than Prudential was taking. They were put on leave in November and dismissed in early December.

Prudential responded in court Wednesday that the trio overstated their involvement in the review, and it denied many aspects of their narrative.

The filing says they were terminated because of "inappropriate and unacceptable workplace misconduct having nothing to do with their involvement in the Wells Fargo review." It says they coordinated to undermine colleagues for purposes of getting some "senior management fired and themselves elevated."

Prudential cited more than 300 pages of text messages by the plaintiffs and another former Prudential employee in 2015 and 2016 that it said contained "innumerable inexcusable comments ranging from an ethnic slur to profane and degrading statements about supervisors and co-workers." This fourth unnamed former employee provided the messages to Prudential. Two managers filed an ethics complaint against the three on Nov. 14, based on the text messages, the Prudential filing says.

A lawyer representing the three former employees couldn't be immediately reached.

Prudential sold about 15,000 policies through Wells Fargo from June 2014 through December 2016, a spokesman said. Premiums on these policies represented less than 1% of Prudential's total U.S. life-insurance premium over the same period, a spokesman said. The "MyTerm" product sold through Wells Fargo is basic term-life insurance in face amounts of $50,000 to $250,000.

The spokesman said Prudential is "working to complete our review of how the MyTerm product was sold through Wells Fargo." The spokesman added that it is reaching out to all Wells Fargo MyTerm customers and will reimburse the full amount of premiums if customers have concerns about the way in which the product was sold.

Wells Fargo has said it is working with Prudential to investigate any unauthorized or inappropriate referrals and also has said it would make things right with customers, if improper conduct is found.

Write to Leslie Scism at leslie.scism@wsj.com

(END) Dow Jones Newswires

January 26, 2017 08:47 ET (13:47 GMT)

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