Last week it was revealed that Wells Fargo had agreed to pay over $185-million in fines to settle claims by the LA District Attorney and federal regulators, following an investigation over sham accounts setup by the bank.
Over 5300 Wells Fargo employees have since been fired. Ironically, the Wells Fargo exec who over saw these employees has resigned and will received over $48-Million in compensation.
The investigation into the phony accounts began with an Los Angeles Times investigation – “The sales tactics, first uncovered by the Los Angeles Times in 2013, involved thousands of bank employees opening as many as 2 million accounts that customers did not authorize in order to meet aggressive sales goals.”
Three different Justice Dept Attorney’s have opened investigations and the Senate Banking Committee is scheduled to hold hearings beginning next week.
New York Times: Wells Fargo Subpoenaed in Sham Account Case
Wells Fargo has received subpoenas from three different United States attorneys’ offices in the last week, escalating an investigation into how thousands of bank employees came to secretly issue more than a million sham accounts without customers’ consent.
Federal prosecutors in Manhattan and San Francisco sent the subpoenas seeking information on the misconduct, according to two people briefed on the matter who were not authorized to discuss it. Prosecutors in North Carolina are also investigating, one of the people said.
Fortune: Here’s How Much Warren Buffett Just Lost on Wells Fargo
Wells Fargo, once the most valuable bank, was outstripped by J.P. Morgan Chase JPM -0.20% Tuesday, as the former struggled to contain fallout from a massive fraud scandal.
As a result, Warren Buffett’s Berkshire Hathaway BRK.A -0.25% has lost enough to fund a new tech unicorn from Wells Fargo’s troubles over the past week—$1.4 billion in all, as of the close of trading on Tuesday, when Wells Fargo’s shares dipped 3.3%. Berkshire is the bank’s single largest shareholder, with 9.4% of the company, a stake that was worth was worth $22.7 billion at the end of June.
CNBC: Wells Fargo’s community banking exec leaving with millions in options
The Wells Fargo executive in charge of the unit where employees allegedly opened unauthorized accounts is walking away from the bank with tens of millions of dollars in stock and options.
Bloomberg TV: Wells Fargo contacted its customers via e-mail to alert them of the scandal surrounding allegations that it opened two million accounts for customers without their knowledge. Chief Executive Officer John Stumpf faces damage to the bank’s reputation and his personal legacy and has been called to testify before Congress next week. Bloomberg’s Laura Keller reports on “Bloomberg ‹GO›.”
