Banking

Feds To Open Probe Over Wells Fargo Sales Shenanigans

The Wall Street Journal reported on Wednesday (Sept. 14) that federal prosecutors are just underway in the earliest stages of an investigation into the sham customer accounts that led to the financial giant being fined $185 million, as noted by unknown sources the financial publication said were “familiar with the matter.” That investigation is being conducted by U.S. attorney’s offices in the Southern District of New York and the Northern District of California.

There is no indication that a case against the company might be forthcoming. It has also yet to be ascertained whether any case would be civil or criminal in nature. Thus far, a subpoena has been issued for documents, and the investigation, according to WSJ, is focused on whether senior officials may have directed the falsification of documents tied to those accounts.

Separately, Tim Smith, shareholder engagement lead at activist investment firm Walden Asset Management, told Reuters that his firm is speaking with investors in Wells Fargo, including labor groups and pension funds, about shareholder resolutions against the bank.

The negative news surrounding Wells Fargo has had an impact in the stock market, as the firm has lost its top-of-the-heap status, with shares slipping 3 percent on Wednesday. The bank’s market cap now stands at $237 billion, compared to $240 billion for JPMorgan. Famed investor Warren Buffett saw his investment vehicle, Berkshire Hathaway, lose $1.4 billion on the share slide, as it is the biggest holder in the firm with a 10 percent stake.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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