Tag Archives: Wells Fargo Fraud

Wells Fargo Pays $3 Billion To Settle Illicit Conduct Of “Staggering Scope & Duration”

Wells Fargo has agreed to pay $3 billion to settle U.S. investigations into more than a decade of widespread consumer abuses under a deal that lets the scandal-ridden bank avoid criminal charges.

The deal resolves civil and criminal investigations. It includes a so-called deferred prosecution agreement, where the Justice Department files, but doesn’t immediately pursue, criminal charges. It will eventually dismiss them if the bank satisfies the government’s requirements, including its continued cooperation with further government investigations, over the next three years.

The accord also resolves a complaint by the Securities and Exchange Commission.

“Our settlement with Wells Fargo, and the $3 billion criminal monetary penalty imposed on the bank, go far beyond ‘the cost of doing business,’” U.S. Attorney Andrew Murray for the Western District of North Carolina said in a statement.

“They are appropriate given the staggering size, scope and duration of Wells Fargo’s illicit conduct.”

All of which means – nobody goes to jail!

While today’s settlement shuts the door on a major portion of the bank’s legal problems related to the fake accounts, a scandal that has claimed two CEOs; it’s hardly the end of the bank’s legal woes. The firm remains under a growth cap imposed by the Federal Reserve. Last month the Office of the Comptroller of the Currency announced civil charges against eight former senior executives, some of whom settled. And probes into other suspected misconduct in other businesses are continuing.

Fed Halts Wells Fargo’s Growth amid Endless Waves of Reckless Abandon

Is this what a “soft nationalization” looks like?

https://www.vaughns-1-pagers.com/economics/wells-fargo/wells-fargo-hells-cargo.jpg

The Federal Reserve on Friday announced it was forcing Wells Fargo to oust board members and limit its growth, responding to a wave of abuses at the San Francisco giant that include opening accounts for customers who didn’t request them.

In the last major move of Chairwoman Janet Yellen’s reign at the central bank, the Fed said it won’t let Wells Fargo WFC, -6.21%  add assets beyond the level of the end of 2017 until it improves governance and controls. Wells Fargo ended 2017 with $1.95 trillion in assets.

Wells Fargo will be able to continue current activities including accepting customer deposits or making consumer loans, the Fed said.

“We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again,” Yellen said in a statement. “The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers.”

The asset cap is unprecedented, according to Federal Reserve officials.

Federal Reserve officials didn’t say it was specifically planned for Yellen’s last day — and they said the bank agreed to the terms on Friday afternoon.

The Fed cited not only the millions of customer accounts Wells Fargo opened without authorization but also more recent revelations that the bank charged hundreds of thousands of borrowers for unneeded guaranteed auto protection or collateral protection insurance for their automobiles.

Screwed by Wells Fargo

Wells Fargo will replace three current board members by April and a fourth board member by the end of the year, the Fed said. Sen. Elizabeth Warren, the Massachusetts Democrat, had requested the Fed oust Wells Fargo board members. The Fed didn’t identify which board members will have to leave.

The Fed also singled out Stephen Sanger, the former lead independent director, and former CEO John Stumpf with letters excoriating them for the abuses.

The vote for the sanctions was 3-0, with the incoming chairman, Jerome Powell, joining Yellen and Gov. Lael Brainard. The new vice chairman for regulation, Randal Quarles, abstained.

Quarles previously said he would recuse himself from Wells Fargo matters because he and his family previously had a financial interest in the bank.

In after-hours trade late Friday, Wells Fargo shares dropped over 5%.

Source: By Steve Goldstein | MarketWatch

Glitch Drains Wells Fargo Checking Accounts

CBS Local — Many Wells Fargo customers got a terrifying shock after finding their checking accounts drained due to a series of errors by the embattled bank. The Jan. 17 glitch reportedly emptied several customers’ accounts after processing their online bill payments twice and doubling transaction fees.

According to CBS News, the banking error also triggered overdraft fees on many checking accounts as customers around the country were mistakenly informed they had a zero balance. The bank’s phone lines were reportedly jammed through the night as angry customers demanded answers for the embarrassing mistake. Wells Fargo later put out a brief statement on Twitter explaining the situation.

The social media outrage was immediate as customers replied to the statement, many who were left without a way to pay for any goods.

Wells Fargo gave an update on the situation on Jan. 18 as the issue is apparently still unresolved.

“We are aware of the online Bill Pay situation which was caused by an internal processing error. We are currently working to correct it, and there is no action required for impacted customers at this time. Any fees or charges that may have been incurred as a result of this error will be taken care of. We apologize for any inconvenience,” Wells Fargo’s Steve Carlson said, via KCCI.

The glitch is the latest black eye for the company, which was involved in a massive scandal in 2016 after it was discovered Wells Fargo employees opened millions of fake accounts to meet sales goals. Several high-level executives at the banking giant have lost their jobs since the scandal broke.

By Chris Melore | CBS Philli