💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

U.S. prosecutors investigate Wells Fargo's sales practices - source

Published 09/14/2016, 09:58 PM
© Reuters. The logo on a Wells Fargo bank building is seen in downtown San Diego
WFC
-

By Nate Raymond

NEW YORK (Reuters) - U.S. prosecutors have begun an investigation related to sales practices at Wells Fargo & Co (N:WFC) that led the bank to agree to a $190 million settlement with regulators, a person familiar with the matter said on Wednesday.

The U.S. Attorneys' Offices in Manhattan and San Francisco are investigating Wells Fargo, the person said, following a settlement announced on Sept. 8 over claims that some customers were pushed into fee-generating accounts they never requested.

Wells Fargo declined to comment on Wednesday. A spokeswoman for U.S. Attorney's Office in Manhattan also declined to comment.

"We don't comment on the existence or non-existence of any investigation," said Abraham Simmons, a spokesman for the U.S. Attorney's Office in San Francisco.

The investigation was first reported by the Wall Street Journal.

The federal prosecutors' probes add a new headache for the company, which has been hit hard by allegations that its staff opened more than two million bank accounts and credit cards for customers without their consent to meet internal sales goals.

As part of last week's settlement, Wells Fargo agreed to pay $185 million in penalties and $5 million to customers. Wells Fargo also said that it had fired 5,300 employees over the sales conduct.

That settlement was with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the Office of the Los Angeles City Attorney.

The bank neither admitted nor denied the allegations as part of the settlement.

On Tuesday, Chief Executive John Stumpf apologized and said the management takes responsibility for the problems identified in the settlement.

Although the bank eliminated sales goals for retail staff, Stumpf said "cross-selling" products from various businesses to customers is still important to expand its business.

© Reuters. The logo on a Wells Fargo bank building is seen in downtown San Diego

(This version of the story has been refiled to correct second paragraph to make clear U.S. Attorneys' Offices are plural)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.