FBI and Federal Prosecutors Probing Wells Fargo Amid Accounts Scandal, Official Says


Posted on: September 14th, 2016 by ABC News No Comments

Monkey Business Images/iStock/Thinkstock(NEW YORK) — The FBI and federal prosecutors in New York and California have opened an investigation intoWells Fargo days after the bank was fined $185 million dollars for alleged misconduct, according to an official briefed on the investigation.

Further details were not immediately available.

The bank is not commenting on the news, which follows allegations last week that hundreds of thousands of unauthorized deposit accounts and credit cards had been opened or applied for between May 2011 and July 2015 without customers’ permission. Some 5,300 employees were fired as a result.

While the investigation is in its early stages, it opens the possibility of criminal charges.

The allegations came to light when the bank was slapped with a $100 million fine from theConsumer Financial Protection Bureau (CFPB), a federal watchdog, on Sept. 8. It was also hit with fines from the Office of the Comptroller of the Currency for $35 million and the County and City of Los Angeles for another $50 million.

The bank said in a statement at the time that it takes responsibility “for any instances where customers may have received a product that they did not request.” Bank officials have also said that they believe all affected customers have been refunded, and sought to downplay the terminations saying that they represented only about one percent of their workforce. Total refunds, the bank said last week, amounted to about $2.6 million.

A portion of the unauthorized deposit accounts generated about $2 million in fees, while a chunk of the credit card accounts generated about $400,000 in fees, according to a CFPB document reviewed by ABC News.

Since then criticism has mounted.

In damage control mode, bank CEO John Stumpf appeared on CNBC Tuesday night before the criminal probe was revealed, where he said that he held himself accountable for the alleged misconduct but said that he did not plan to resign.

“I think the best thing I can do right now is lead this company,” Stumpf said.

The Los Angeles city attorney said employees were opening and funding accounts without customers’ permission or knowledge in order to “satisfy sales goals and earn financial rewards under the bank’s incentive-compensation program.”

The bank announced yesterday that by Jan. 1, 2017 it would stop imposing those sales goals on employees. Asked why the goals program wouldn’t end immediately, a bank spokesperson told ABC News that it would spend the intervening months to ensure “team members receive fair compensation through the transition.”

Copyright © 2016, ABC Radio. All rights reserved.



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FBI and Federal Prosecutors Probing Wells Fargo Amid Accounts Scandal, Official Says


Posted on: September 14th, 2016 by ABC News No Comments

Monkey Business Images/iStock/Thinkstock(NEW YORK) — The FBI and federal prosecutors in New York and California have opened an investigation intoWells Fargo days after the bank was fined $185 million dollars for alleged misconduct, according to an official briefed on the investigation.

Further details were not immediately available.

The bank is not commenting on the news, which follows allegations last week that hundreds of thousands of unauthorized deposit accounts and credit cards had been opened or applied for between May 2011 and July 2015 without customers’ permission. Some 5,300 employees were fired as a result.

While the investigation is in its early stages, it opens the possibility of criminal charges.

The allegations came to light when the bank was slapped with a $100 million fine from theConsumer Financial Protection Bureau (CFPB), a federal watchdog, on Sept. 8. It was also hit with fines from the Office of the Comptroller of the Currency for $35 million and the County and City of Los Angeles for another $50 million.

The bank said in a statement at the time that it takes responsibility “for any instances where customers may have received a product that they did not request.” Bank officials have also said that they believe all affected customers have been refunded, and sought to downplay the terminations saying that they represented only about one percent of their workforce. Total refunds, the bank said last week, amounted to about $2.6 million.

A portion of the unauthorized deposit accounts generated about $2 million in fees, while a chunk of the credit card accounts generated about $400,000 in fees, according to a CFPB document reviewed by ABC News.

Since then criticism has mounted.

In damage control mode, bank CEO John Stumpf appeared on CNBC Tuesday night before the criminal probe was revealed, where he said that he held himself accountable for the alleged misconduct but said that he did not plan to resign.

“I think the best thing I can do right now is lead this company,” Stumpf said.

The Los Angeles city attorney said employees were opening and funding accounts without customers’ permission or knowledge in order to “satisfy sales goals and earn financial rewards under the bank’s incentive-compensation program.”

The bank announced yesterday that by Jan. 1, 2017 it would stop imposing those sales goals on employees. Asked why the goals program wouldn’t end immediately, a bank spokesperson told ABC News that it would spend the intervening months to ensure “team members receive fair compensation through the transition.”

Copyright © 2016, ABC Radio. All rights reserved.



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You must be logged in to post a comment.