Wells Fargo’s shares have dropped approximately 5.6 percent since last week when the $185 million fine against the bank was unveiled, and the Senate Banking Committee said Monday that it would hold a hearing next week on Wells Fargo’s sales practices Chief executive financial officer John Shrewsberry said Tuesday that the move to eliminate product sales goals is meant to give Wells Fargo’s customers full confidence that the bank is always acting in their best interests.
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Additionally, the bank said this week that it would scrap sales goals at in its retail-banking operation. The bank neither admitted nor denied wrongdoing as part of the settlement.
The investigation is being conducted by the US attorney’s offices for the Southern District of NY and the Northern District of California, these people said. Prosecutors have yet to decide if any case, should they decide to pursue one, would be along civil or criminal lines, the people said.
Mark Folk, a spokesman for the San Francisco-based bank, declined to comment. Wells Fargo CEO John Stumpf has accepted an invitation to testify at the hearing. The stock has slumped 6.5 percent since the settlement was announced, the worst performance in the 24-company KBW Bank Index.
Wells Fargo & Company – the world’s largest bank by market capitalisation – has been fined R2.6 billion ($185 million) for creating over 1.5 million checking and savings accounts and 500 000 credit cards that its customers never authorised.
Following criticisms that USA authorities had failed to hold bankers to account in the aftermath of the financial crisis, the Justice Department last September issued a policy requiring all civil and criminal cases begin and end with a focus on individual accountability.
The involvement of the Justice Department raises the stakes because it holds responsibility for criminal prosecutions and can seek more severe penalties or charges against individual employees.
Despite the outcry over unauthorized accounts, Stumpf said yesterday that he has no plans to resign.
“We have been making some changes to how we do business over the last several years to ensure we are always aligned with our customers’ interests”, Stumpf said in the email.
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