Security & Fraud

DOJ Probes Wells’ Wholesale Banking Ops

Add another investigation to the roster of headlines swirling around Wells Fargo.

As The Wall Street Journal reported on Thursday (Sept. 6), the Justice Department has opened an investigation into possible fraud committed at the company’s wholesale banking unit.

The financial publication, quoting unnamed “people familiar with the matter,” said that the probe follows “revelations that employees improperly altered customer information” – including adding information such as Social Security numbers to documents without those employees’ consent.

The wholesale banking unit works with the bank’s corporate customers. The alleged document mishandling occurred late last year and into early 2018, said WSJ. The documents were tied to the business banking group, which operates as part of the wholesale banking operation, where those corporate clients have top lines in the range of $5 million to $20 million. Similar issues have arisen with middle market firms and with corporate trust services.

The publication had previously noted that the Wells employees had altered documents ahead of regulatory deadlines tied to a 2015 consent order from the Office of the Comptroller of the Currency (OCC). That order sought to improve Wells’ anti-money laundering controls, with stipulations in place tied to what constitutes proper documentation and “know your customer” activities.

The firm had more than 100,000 customer accounts that at the time of the 2015 order still needed proper verification to keep banking relationships in place.

The Journal reported that in recent weeks, the Justice Department has made efforts to find out if management pressures had been in place to get those employees to alter and add that information.

The latest investigation joins other probes into the bank’s practices, such as a scandal that rocked the firm’s consumer operation, first illuminated a few years ago. Other investigations have found a raft of issues, such as inflated sales targets and charges levied improperly on Wells clients.


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