The Wells Fargo fake account fiasco continues to draw the attention of regulators who, just like the bank’s executives, somehow spent years not noticing that Wells Fargo employees were opening up bogus accounts to meet strict sales goals. This morning, the bank confirmed a Security and Exchange Commission probe related to this chicanery.
This investigation was mentioned this morning in a new SEC filing along with a bunch of other, more vague, “formal or informal inquiries, investigations or examinations” by state and federal regulators and legislators.
While the filing does not specify the nature of the probe beyond its connection to the fake account scandal, the Wall Street Journal reported yesterday that the SEC is looking into whether or not Wells misled investors by promoting the financial benefits of its cross-selling policies (i.e., getting employees to sell lines of credit to checking account customers, mortgages to credit card customers, etc.) while failing to properly disclose that it was aware of employees who had gamed this system by opening fraudulent, unauthorized accounts in customers’ names.
Recently “retired” CEO John Stumpf admitted before lawmakers in September that he first learned of the problem in 2013, and there is significant evidence that whistleblowers at the bank alerted — or at least tried to alert — high-level Wells executives of problems as far back as 2006 and 2007.
Speaking of whistleblowers, the SEC probe may also be looking into allegations that the bank dismissed or retaliated against employees who tried to shine a spotlight on Wells staff that were opening these bogus accounts.
by Chris Morran via Consumerist