Daily Archives: September 17, 2016

Ex-Wells Fargo employees challenge CEO’s fraud denial

A wave of former Wells Fargo employees are shooting down claims made by Chief Executive John Stumpf that the bank had “no incentive to do bad things.”

“I saw people that left a wake of screwed customers get promoted past me because they were willing to do all the sh– they shouldn’t,” one former banker posted on an online forum recently.

“Doing the stuff [the bank] got popped for was a known secret, and damned near every one did it,” the person, who goes by the screen name FormerWF, said in an “Ask Me Anything” forum on Reddit on Sept. 10.

Read on.

Did the revenues from those fake accounts helped them Wells Fargo post better returns than some of its rivals?

That’s the question of the day…

From Nightly Business Report transcript:

PEARSON: On Wall Street, some analysts are questioning if revenues from
those fake accounts may have helped them Wells Fargo (NYSE:WFC) post better
returns than some of its rivals.

BOVE: When Wells Fargo (NYSE:WFC) made these presentations to analysts
about the number of accounts it was opening, about the cross selling ratio
it was giving. If all of those numbers were incorrect, if revenue was
seeping into these numbers, then there`s real questions about numbers of
Wells Fargo (NYSE:WFC) itself.

PEARSON: Here in Washington, there`s bipartisan criticism of the Wells
Fargo (NYSE:WFC) settlement. A leading Republican says it`s another
example of big government propping up a mega bank at the expense of
community banks, while a leading Democrat sees echoes of the foreclosure
crisis.

For NIGHTLY BUSINESS REPORT, Hampton Pearson in Washington.

Prosecuting Wells Fargo Executives Won’t Solve Anything

I know. I helped prosecute the executives at the center of Enron.

 

It was revealed last week that Wells Fargo, the second-largest bank in the country, has been caught in a craven money grab at the expense of its smallest retail customers in a scandal that recalls abuses of the 2008 financial crisis in terms of sheer audacity. Taking a page from the telecom companies that used to “slam” customers by changing their long-distance providers without notice or request, Wells Fargo’s salespeople opened millions of credit card and other accounts for individuals who did not ask for them, producing fees for the bank and inflicting credit damage on consumers.

It’s plain why this happened. The cause was a familiar two-step among the management of the massive corporations that dominate global banking and many other industries. Step one: Set aggressive sales and earnings targets, using employee compensation as the incentive to get there. Step two: Fail to monitor the salespeople (or traders, or engineers, or whomever might be on the front lines several levels down) who inevitably respond to the enormous financial and career pressures—and lax supervision—by crossing ethical and legal lines.

 

Read on.

Wells Fargo Faces Proposed Class Action Lawsuit Over Bogus Account Scandal

Wells Fargo & Co, embroiled in a scandal over the opening of sham accounts, was sued on Friday by customers who accused the bank of fraud and recklessness for its behavior.

The lawsuit was filed in the U.S. District Court in Utah, and seeks class-action status on behalf of hundreds of thousands of customers nationwide.

Wells Fargo did not immediately respond to requests for comment.

Read on.

Deutsche Bank to fight $14 billion demand from U.S. authorities

Deutsche Bank  (>> Deutsche Bank AG) said it would fight a $14 billion (11 billion pound) demand from the U.S. Department of Justice to settle claims it missold mortgage-backed securities, a shock bill that raises questions about the future of Germany’s largest lender.

Deutsche Bank  (>> Deutsche Bank AG) said it would fight a $14 billion (11 billion pound) demand from the U.S. Department of Justice to settle claims it missold mortgage-backed securities, a shock bill that raises questions about the future of Germany’s largest lender.

The claim against Deutsche, which is likely to trigger several months of talks, far exceeds the bank’s expectations that the DoJ would be looking for a figure of only up to 3 billion euros ($3.4 billion).

Read on.