United States: Wells Fargo & Co enters into settlement discussions with Justice Dept & SEC over probing its 'sales practices'

February 28, 2019:

On Wednesday, Wells Fargo & Co said that it entered preliminary settlement discussions with the U.S. Department of Justice and the Securities and Exchange Commission over previously disclosed probes into its sales practices.

In an annual regulatory filing, the bank said it raised the maximum figure it could exceed its legal reserves by as much as $2.7 billion, an increase of $500 million since it last reported the number in Nov.

Wells Fargo has faced a long list of penalties related to a sales scandal beginning in 2015 which initially related to employees in the consumer bank opening millions of accounts in customers’ names without their permission. It has since spread to other bank businesses, from mortgage banking to auto lending.

To date the bank has paid out over $4 billion in settlements and fines related to the scandal and has faced probes from the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Los Angeles city attorney and the New York Attorney General.

Lingering investigations by the SEC, the Department of Justice and the Department of Labor represent the largest open questions hanging over the bank’s head.

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