Senators Want To Know Why KPMG Didn’t Catch Wells Fargo Fake Accounts

Sen. Elizabeth Warren (D-MA) has reportedly sent a letter to KPMG, Wells Fargo’s auditor, questioning why the accounting firm did not catch the fake accounts that resulted in $185 million in fines for Wells Fargo.

According to a report in New York Post, KPMG has green-lighted Wells Fargo’s public financial documents from 2011 to 2016, which are the five years the Consumer Financial Protection Bureau honed in on with its investigation of the fake accounts, said Sen. Warren in the letter. “But none of KPMG’s audits identified any concerns with illegal behavior that resulted in the creation of over 2 million unauthorized accounts by thousands of employees,” the letter said.

Other senators joining Sen. Warren in the letter include Sens. Bernie Sanders (D-VT), Mazie Hirono (D-HI) and Edward Markey (D-MA), New York Post reported.

“We have received the letter and are currently reviewing it. We are confident in our work and look forward to responding,” Manuel Goncalves, a KPMG spokesman, said in a statement, noted the report.

In September, the Consumer Financial Protection Bureau announced Wells Fargo agreed to pay a $185 million fine and refund $5 million in fees that the bank wrongly charged customers. According to an investigation by the CFPB, Wells Fargo employees not only made fake deposit accounts but also submitted 565,443 unauthorized credit card account applications on behalf of unknowing customers. It’s estimated that 14,000 of those accounts accrued $403,145 in fees. Through its own independent investigation, the bank discovered a total of $2.6 million in unauthorized fees.

The subsequent backlash from the actions of Wells Fargo resulted in John Stumpf, the embattled chairman and chief executive of scandal-plagued Wells Fargo, relinquishing his position. President and Chief Operating Officer Timothy Sloan replaced Stumpf. Sloan was expected to be Stumpf’s replacement when he retired down the road. Stephen Sanger, independent director of Wells Fargo, was named board chairman, while Elizabeth Duke, a current director and former Federal Reserve governor, was named vice chairman.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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