DOJ Investigating Possible Abuses In Wells Fargo's Wealth-Management Unit

Some weeks, it seems like barely a day goes by without learning about some new nefarious activity perpetrated by Wells Fargo, or their repercussions.

Case in point, yesterday, Reuters reported that the Office of the Comptroller of the Currency was preparing to sanction the bank for charging customers for auto insurance they didn't really need. The bank has blamed a third party for wrongly layering the insurance policies on its auto borrowers.

Wells Fargo’s auto insurance woes stem from a policy drivers must carry when they borrow money to buy a new car. It pays out to the bank when a car is stolen or destroyed.

Wells Fargo required drivers to carry their own policies, but had a right to “force-place” a policy on borrowers who let insurance lapse. Insurers working for Wells Fargo pushed policies onto 570,000 customers who already had coverage and then delivered profits for the bank.

Wells is investigating auto insurance abuses back to 2005 and estimates it will need to refund $145 million to borrowers, and adjust account balances by another $37 million, according to securities filings. That is up from its initial cost estimate of $80 million.

Then on Friday, the Wall Street Journal reported that the Department of Justice is investigating possible abuses in the bank's wealth-management business. The abuses reportedly took place in the Phoenix area, which was also an epicenter of the bank's cross-selling scandal. After whistleblowers reportedly informed the US government that there might be something amiss in Phoenix, regulators instructed Wells to launch an internal probe. As part of the probe, investigators are interviewing employees from the bank's Phoenix Wealth Management office. However, the exact nature of the suspected wrongdoing is unclear.

The Justice Department and Securities and Exchange Commission are now probing the bank’s wealth-management business, these people said. Agents from the Federal Bureau of Investigation have been interviewing some wealth- management employees in the Phoenix area as recently as this week, some of these people said.

Wells Fargo declined to comment. Officials at the Justice Department and SEC also declined to comment.

Several U.S. Attorney’s offices, as well as a bevy of federal and state regulators, have been investigating Wells Fargo since fall 2016 when the bank disclosed widespread sales-practices problems. Those included bank employees opening as many as 3.5 million accounts without customers’ knowledge or authorization. Wells Fargo has said it is cooperating with the investigations.

Arizona was one epicenter of Wells Fargo’s retail-banking sales practices problems. Some employees in that region created fake email addresses using customers’ phone numbers to open banking accounts or opened two accounts for each customer, a practice known as a “double pack.” Some top executives from that region have since been terminated by the bank.

At some point, the DOJ launched its own investigation, separate from the internal probe.

Despite firing executives, including former CEO John Stumpf, and offering to reimburse customers, lawmakers like Senator Elizabeth Warren have criticized the bank and demanded that more changes must be made.

Wells

During a recent hearing, Warren questioned the bank's decision to send out "opt-in" letters to people affected by its abuses, and accused the bank of not doing enough to make sure customers are fairly compensated.

* * *

Even though Warren has labeled him "incompetent" and suggested that he should step aside as WFC's CEO, the Wells Fargo's board of directors awarded CEO Tim Sloan a 36% raise. Sloan's total compensation climbed to $17.4 million, compared with almost $13 million in 2016, thanks to increased stock awards, per CNNMoney.

The board cited the bank's "solid financial performance," including low credit losses, strong capital and a slight increase in annual profits to $22.2 billion. The board also noted Sloan's "continued leadership" on the "top priority of rebuilding trust and building a better bank." The board believes that paying executives in stock is preferable to cash because it aligns the executive's incentives with the long-term goals of the company.

Last month, the Federal Reserve announced what at first seemed like a shocking crackdown by imposing sanctions that would prevent the bank from growing its assets beyond their end-2017 levels. Though analysts were quick to point out that the sanctions lacked teeth.

For now the price is falling...

Of course, the big question is What Will Warren Buffett Do (WWWBD)?

Comments

cheka Haus-Targaryen Fri, 03/16/2018 - 12:33 Permalink

cant make this stuff up.  student gun grabbing walk out.  shows exactly why we NEED rifles with high capacity

http://www.texaspolicenews.com/default.aspx?act=Newsletter.aspx&categor…

A crowd of Chicago students demanded gun control by rioting and looting on Wednesday.

Chicago, IL – A crowd of students swarmed a south side strip mall during Wednesday’s National Walkout Day demonstration, leaving a trail of destruction in their wake.

“They pretty much trashed this whole area,” GameStop manager Robert Owens told Blue Lives Matter on Thursday.

The nationwide demonstration, touted as a demand for gun control legislation, was slated to last for exactly 17 minutes, in remembrance of each of the 17 people murdered during the Valentine’s Day massacre at Marjory Stoneman Douglas High School, the Chicago Sun Times reported.

Not all of the protests were peaceful.

On Chicago’s South Side, Simeon Career Academy students descended on businesses situated in a strip mall behind the school, and began harassing customers and employees.

“Things started out cool,” a Potbelly Sandwich Shop manager, who did not want to be further identified, told Blue Lives Matter. “But then some of the guys started yelling, threatened the employees, and said they were going to come back [into the kitchen area] and make their own food.”

There were at least 50 teens in the eatery at one point, and they came inside in groups of 10 to 15 at a time, he said.

The manager noted that Potbelly’s also serves many elderly customers, some of whom were in the shop when the students began wreaking havoc.

He said that the students’ behavior and vulgar language was “disrespectful,” and that the Potbelly’s employees were ultimately forced to contact Chicago police as the teens’ antics escalated.

The students were escorted out of the restaurant by law enforcement before they caused any physical damage to the business, the manager said.

Meanwhile, at a nearby GameStop, alert employees began to grow concerned as approximately 20 teens began milling around the store without making any purchases, Owens told Blue Lives Matter.

Owens said that the students moved through the area outisde the store in a “huge, single-file line.”

GameStop employees were able to clear out customers, and locked up the business before problems arose, he said, adding that nearby stores were not so fortunate.

According to an anonymous J&J Fish and Chicken employee, the students attacked a delivery truck outside of the restaurant, and stole numerous Arizona-brand drinks that were being delivered to the business.

“There was no trouble inside, just outside,” the employee told Blue Lives Matter.

The Potbelly’s manager said that the shop has experienced problems with Simeon students in the past, usually due to fights. In light of Wednesday’s events, the business may require students to be accompanied by adults in order to receive service, he said.

Video of the teens trashing a nearby Walmart store during the protest went viral before the video was taken down several hours later. A Walmart store manager told Blue Lives Matter that he was not allowed to provide any information regarding the incident.

 

In reply to by Haus-Targaryen

GoysRUs18 cheka Fri, 03/16/2018 - 13:12 Permalink

Good one Check. In the city of a Talmudic , former IDF, daddy had a thing for Hotels and buses run city .. Isnt it really funny. . Seems Rahm , co dual citizens and his scum bag buddies in the media like. Trib Editorial board, the Rex Hukabee, Lynn Sweets have so much concern about the children .. but when it comes to Palestinian children well thats a whooooole different story isnt it. ?

 

https://twitter.com/Pal_Children

 

Dare you all. Try to take a gander if you can stomach it. And in the mean time feel free to all your Israel firster Congress critter and ask them that question

110 and Never Again !

In reply to by cheka

gregga777 chunga Fri, 03/16/2018 - 13:09 Permalink

It's formal title is the US Department of Corruption, Injustice & Persecution. The Weasels are part of the US DoJ (US Department of Corruption, Injustice & Persecution), too. The US Supreme Perverts in black robes are part of the judicial branch of government but, since they don't control the Army who gives a shit about them.

 

 

In reply to by chunga

blindfaith CarthaginemDel… Fri, 03/16/2018 - 13:11 Permalink

 

 

But But BUT...it is one of Uncle Warren Buffets companies. Next the government will crack down on his Kraft, Baskin Robins, Hinze, Dairy Queens, Dunkin Donunts, Pizza, Oscar Myer, and all the rest of his fat/sugar/salt companies.  Let hope they don't look into his oil transport business then he just might get a bonus.  At least his car insurance business is 'honest'.

In reply to by CarthaginemDel…

ZENDOG Fri, 03/16/2018 - 12:26 Permalink

Burn them to the ground..

When Wells signs me up, and bills me for shit I did not order or approve, that's Identity Theft. Why are they not being prosecuted for the Felony?

Burn the Fuckers to the ground.

buzzsaw99 Fri, 03/16/2018 - 12:35 Permalink

Even though Warren has labeled him "incompetent" and suggested that he should step aside as WFC's CEO, the Wells Fargo's board of directors awarded CEO Tim Sloan a 36% raise...

translation:  fuck you pocahontas.

Xscream Fri, 03/16/2018 - 12:36 Permalink

Why would ANYONE keep doing business with this bank. Not like there are not plenty of other banks. Banks and pharmacy's are every quarter mile. Kinda make you think we are being ripped off if they all make huge profit. 

buzzsaw99 Fri, 03/16/2018 - 12:37 Permalink

However, the exact nature of the suspected wrongdoing is unclear...

if it is in wealth management i can guess.  furthermore they all fist da muppets so fuck you liz and the whores you rode in on.

tlnzz Fri, 03/16/2018 - 12:40 Permalink

It has been clearly documented that Wells Fargo is, and has been, operated as a criminal organization. How does it keep avoiding a forced breakup or being put into receivership by the regulators?

HRH of Aquitaine 2.0 Fri, 03/16/2018 - 12:43 Permalink

Oh look! We Will Fuck You Hard (and you will like it or else) Bank is being investigated! Fine when they were fucking over the sheep but messing with people with money, oh, that can't be tolerated!

wisebastard Fri, 03/16/2018 - 15:03 Permalink

whistle blower said their was wide open and encouraged crime, and that if you did not play along you did not have a job....DOJ says there might be a problem.....

Joe_in_Indiana Fri, 03/16/2018 - 15:58 Permalink

Wells Fargo tried to churn a friend's IRA stock account just recently, all big winners with good dividends and put him in some fly by night stocks. Told him NO NO NO!!! He got a second opinion from his other firm he has business and they told him NO!

A POX on their house!

Calculus99 Fri, 03/16/2018 - 16:12 Permalink

If you only follow one rule in life, follow this -

NEVER do business with a company that has 'Wealth Management' in its name (or a sub-division as in Wells).