Security & Fraud

Wells Probes Wealth Management Sales Practices

The controversy surrounding Wells Fargo continues.

The beleaguered banking giant is looking inward once again, evaluating its wealth and investment management business in search of “possible customer abuse,” as Reuters reported.

Those abuses would include overcharging clients and making inappropriate referrals, the newswire reported.

The board of directors is looking at those business practices – which span alternative investments, 401-K plans and other investment vehicles –in the wake of inquiries from the government.

The news was disclosed in a 10K filing with the Securities and Exchange Commission (SEC). The U.S. Justice Department had instructed the company to investigate the wealth management operations, as whistleblowers said the company had sought to bring customers to “non-essential products or services.”

CEO Tim Sloan said in a statement that “when we discover a problem, we are moving to find the root cause and fix it.”

The filing stated that Wells found in its review that some wealth management customers were overcharged alongside “incorrect set-up and maintenance in the system of record.”

As has been widely reported, the company has seen a year-long scandal unfold over its retail practices, as Wells employees opened fake accounts in customers’ names without their knowledge or permission. In other news tied to the company, improper practices have been illuminated in Wells units as far-flung as auto insurance and mortgage lending.

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