US prosecutors investigate Wells Fargo’s sales practices: Sources

The company has been hit hard by allegations that its staff opened more than two million bank accounts and credit cards for customers without their consent.

By: Reuters | New York | Updated: September 15, 2016 8:03 am
Wells Fargo, Wells Fargo bank account scandal, illegal bank account, Wells Fargo investigation, US attorneys' office, Wells Fargo news, business news, companies news, latest news, Indian express US prosecutors have begun an investigation related to sales practices at Wells Fargo & Co that led the bank to agree to a 0 million settlement with regulators, sources claim. (Source: AP)

US prosecutors have begun an investigation related to sales practices at Wells Fargo & Co that led the bank to agree to a $190 million settlement with regulators, a person familiar with the matter said on Wednesday.

The US 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 US 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 US 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.