Wells Fargo Shares Dive After 10Q Reveals Potential For "Significantly" More Fake Accounts

Wells Fargo just released a lengthy 10Q revealing a number of concerns for shareholders with regard higher-than-expected legal costs, new auto loan sales 'issues', and the potential for "significantly" more fake accounts based on a wider review. Ironically, WFC's CEO Tim Sloan began his press release thus... "rebuilding trust became our top priority when I became CEO last October."

Headlines from the 10Q (via Bloomberg)

  • *WELLS FARGO SEES POSSIBLE LEGAL COSTS BEYOND RESERVES OF $3.3B
  • *WELLS FARGO SAYS CFPB INVESTIGATING FREEZING OF CLIENT ACCOUNTS
  • *WELLS FARGO TO INCREASE BOGUS ACCOUNTS REVIEW BY 3+ YEARS
  • *WELLS FARGO:WIDER EXAM MAY FIND `SIGNIFICANTLY' MORE FAKE ACCTS
  • *WELLS FARGO `ANTICIPATES' IDENTIFYING, REMEDIATING AUTO ISSUES
  • *WELLS FARGO SAYS AUTO REVIEW MAY INCLUDE ORIGINATION, SERVICING
  • *WELLS FARGO:AUTO INSURANCE ISSUE MAY RESULT IN REGULATOR PROBES
  • *WELLS FARGO SAYS IT DISCLOSED CLIENT DATA LEAK TO AGENCIES

"We expect that our review of the expanded time periods, which adds over three years to the initial review period of approximately four years (May 2011 to mid-2015), and our review and validation efforts for the initial review period, may lead to a significant increase in the identified number of potentially unauthorized accounts.

 

However, we do not expect any incremental customer remediation costs as a result of these efforts to have a significant financial impact on the Company."

And the result...

Comments

NoVa jcaz Fri, 08/04/2017 - 14:47 Permalink

I worked at Norwest in Des Moines back in the mid '90s. Kovachivich days before Norwest took over Wells Fargo (er, "merged").  Pushing products was cultural back to the '80s!Back then Cross-Selling products was encouraged and they compensated management on "Soft-Dollar Credits".  recorded in the General Ledger but the GL accounts used were outside of the real GAAP ledger which was given to regulators and used for SEC results. Hence, outsiders never saw the soft $$ credits but internal management saw soft $$ on their P&Ls. 

In reply to by jcaz

NoVa NotApplicable Fri, 08/04/2017 - 15:41 Permalink

er, Not Funny.I suspect it has now stopped.  Dodd-Frank & CFPB has pretty much commoditized mortgages - tell her to shop around and show quotes to other lenders to "beat this rate & fees". Mortgage industry is starting to show signs of bleeding, with some firms facing going out of business.  I'm CFO of a large lender.  NoVa

In reply to by NotApplicable

pickupthatcan NoVa Fri, 08/04/2017 - 16:07 Permalink

WF held my mortgage when I sold the house in '11. They had all my forwarding info. Account closed and cleared. Last month I checked my state's abandoned property website. Wells Fargo had $4200 of mine for the last six years and never disclosed it until they turned it over to the state two months ago.

I wonder how much they make on all the other monies they keep over the years?

In reply to by NoVa

techpriest SloMoe Fri, 08/04/2017 - 15:26 Permalink

Need more de-regulation. That'll fix it.

Yes, it would.

In particular, these frauds can go out of business, not be bailed out, and we can watch the credibility of big bank promoters evaporate.

For that matter, we could start a Bank of ZH if we wanted to, aside from the "bank" you lost in a boating accident of course.

In reply to by SloMoe

wet_nurse Fri, 08/04/2017 - 15:01 Permalink

Can't the police just go there and confiscate their money if they suspect it was earned from crime? Maybe that's why Sessions reinstated that practice.

JRev (not verified) wet_nurse Fri, 08/04/2017 - 15:15 Permalink

The "fake" accounts at all major commercial banks are for laundering Intelligence drug money. .gov takes a sizable percentage. This is per HSBC whistleblower John Cruz and was publicized well before the Wells Fargo "shadow account" story broke: https://www.youtube.com/watch?v=R5Y4UGPQTLgSessions is a wet blanket. A soup sandwich. He'll bust the "competition" (darknet markets) but will never go after the true cash cow.

In reply to by wet_nurse

insanelysane Fri, 08/04/2017 - 15:18 Permalink

1. Who still has a bank account with this bank?2. How can there be any real accounts?  Fake accounts became standard operating procedure.  I would be surprised to find employees that know how to create an actual account on their computer system.  That function is most likely hidden.3. This is why we haven't heard from VW about a fix for their diesel engines.  Once the cheating software became sucessful there was no need to pay diesel engineers.  VW doesn't have anyone to figure out how to fix the issue.  Neither does Wells Fargo.

StreetObserver Fri, 08/04/2017 - 16:48 Permalink

We heard about a guy that got a Wells Fargo trifecta, they screwed him on his mortgage and he lost his house, they forced him to buy car insurance and deducted it from his monthly car payments, even though he was insured through a another insurance company and the messed with his credit.His reaction? He swears he'll buy can of spray window foam and hit every Wells Fargo ATM card slot until they either go bankrupt or change the technology. Short term profits breed long term resentments.

TheObsoleteMan Fri, 08/04/2017 - 18:55 Permalink

Why should anyone be surprised by any of this? When you are too big to fail, and are above the law, you can do as you damn well please. There are no costs for your actions.