The investigation, which is at an early stage, is looking at whether senior bankers directed lower-ranking employees to falsify documents in conjunction with two million accounts that were opened without customer knowledge, said the newspaper.
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The bank’s agreement last week to pay $190 million to settle claims it created roughly 2 million accounts that customers did not want has shaken investors, with the bank’s stock falling about 7.5 percent, cutting its market capitalization by some $19 billion.
It’s not clear if the investigation will lead to charges and Wells Fargo has declined to comment. One of the United States’ largest and most respected financial institutions, Wells Fargo built itself into the most valuable USA bank after the financial crisis partly because it did not rely on risky trades or complex derivatives to turn a profit. The abusive practices by the bank is estimated to have cost customers over $2.5 million.
And on Tuesday, Stumpf will be in the hot seat as Elizabeth Warren and her colleagues on the Senate banking committee hold a Wells Fargo hearing. The scandal was first brought to light by the L.A. Times, which in 2013 chronicled the pressure-cooker sales culture at Wells Fargo that led to the illegal activity.
Wells Fargo has fired 5,300 employees connected to the problem.
“We don’t comment on the existence or non-existence of any investigation”, said Abraham Simmons, a spokesman for the US Attorney’s Office in San Francisco. Regulators said the misconduct occurred beginning in 2011. In some cases, the employees took money from an established account to create a new one.
But a June 2016 report by the National Employment Law Project published statements collected from employees at numerous banks, in addition to Wells Fargo, reporting questionable and possibly abusive sales practices.
Chief Executive Officer John Stumpf also sent an email to customers on Wednesday apologizing for the actions.
The subpoenas are the latest blemish for Wells Fargo, which until Tuesday was the largest bank in the USA by market capitalization.
Wells Fargo has long cultivated a reputation for staying out of the regulatory headaches that have dogged some of its biggest competitors.
Stumpf is expected to testify before the Senate Banking Committee next week on the affair.
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Asked about Wells Fargo’s recent settlement, Calpers spokeswoman Megan White said via e-mail the system “will be reviewing the issue in our proxy vote” and declined further comment. The news was reported earlier by The Wall Street Journal. They all worked in Ms. Tolstedt’s community banking division, the company said.
