It also appears that this manager is misusing her position to waive and/or refund fees for her friends. You might want to refer to your employee handbook. It probably states that employees shall not be involved in the transactions of their family, friends, etc. This would also include transaction approvals. And be sure you have your employee evaluations handy to immediately disprove any claims of poor performance, should they arise out of retaliation.
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I've just writed a wrong.