Daily Archives: October 1, 2016

Connecticut Treasurer to Review Wells Fargo Relationships

State Treasurer Denise Nappier will review all of Connecticut’s business relationships with Wells Fargo, as the bank is mired in scandal over bogus accounts. Wells Fargo is leading a bond sale for Connecticut next month; Nappier now says she will appoint Morgan Stanley to partner in managing that sale.

Read on.

City of Philadelphia is reviewing its longstanding relationship with Wells Fargo

On the heels of the state of California suspending doing business with the San Francisco-based bank for the next 12 months, a spokesman for Philadelphia Mayor Jim Kenney said, “The city is currently evaluating that relationship.”

City Council unanimously passed a resolution, sponsored by Councilwoman Cindy Bass, on Thursday calling for council to investigate the impact of the scandal on Philadelphia residents and consider whether the city should “deposit or invest taxpayer funds in financial institutions such as Wells Fargo, which promote policies that defraud its customers, blame its non-management employees for executive decisions, and has a history of predatory lending practices against minorities.”

Read more: http://www.nbcphiladelphia.com/news/local/Fake-Accounts-Scandal-Threatens-City-Governments-Relationship-Wells-Fargo-395446201.html#ixzz4LofNRmz8

Wells Fargo May Exit Public Finance, Court Street Group Says

Wells Fargo & Co. may be forced to leave the municipal-debt underwriting business for a short period of time because of the backlash from the bank’s mishandling of client accounts, according to Court Street Group, a New York-based research and consulting firm.

  • No consideration of leaving the business, Wells Fargo spokesman Gabriel Boehmer says in an e-mail response
  • “We believe the long-term prospects for Wells Fargo in municipal finance remain very promising. We expect to continue to work closely with our clients in municipal finance and remain committed to the industry as a department and as a firm,” Boehmer says
  • Impact of California’s ban of Wells Fargo in bond deals may exceed that of UBS Group AG exiting muni underwriting, says report by Court Street’s Matt Posner, Bob Donahue and Joseph Krist
  • Other states may follow suit and bar Wells Fargo from managing bond deals, report says

Read on.

Fired Manchester teller sues Wells Fargo

Wells Fargo retaliated against a bank teller at a branch in Manchester, firing her for missing sales goals that were so unreasonable they caused other employees to cheat customers to save their jobs, a lawsuit filed Friday in state Superior Court said.

Lenore Kuter, 61, of Manchester, refused to sell products to customers who didn’t need them and signed a petition protesting the company’s practices, but her objections were ignored, the lawsuit said.

“She could not attain the sales goal by being honest and ethical,” said John Tatulli, Kuter’s Shrewsbury-based attorney.

Read on.

Illinois to Suspend Wells Fargo From Bond, Investing Work

Wells Fargo is so screwed… I wonder if  Washington and New York will follow the league of Illinois, California, and Oregon…

llinois is joining California in suspending Wells Fargo & Co. from handling “billions” of dollars in investment work and the underwriting of state debt after the company admitted to opening potentially millions of bogus customer accounts.

Treasurer Michael Frerichs said in a statement the he will announce details of the ban during a news conference in Chicago on Monday. The suspension includes municipal-bond underwriting, according to Greg Rivara, a spokesman for the treasurer.

“In isolation, Illinois is not as significant as California, but its part of a mosaic that’s starting to take form,” Charles Peabody, a managing director at Compass Point Research LLC, said in a telephone interview, noting that it’s surprised industry watchers that the cross-selling scandal has begun to impact Wells Fargo’s corporate bank. “And the mosaic that’s being built out does not paint a bright picture for 2017 earnings.”Read on.

Wells Fargo Must Answer for Wachovia’s Alleged Fraud

CN) — Wells Fargo must face fraud claims over $163 million in securities that Wachovia, now owned by Wells Fargo, allegedly used as a “dumping ground” for assets it wanted off its books, a federal judge ruled.
A number of specialized investment entities sued Wells Fargo in New York after three collateralized debt obligations marketed by Wachovia Capital Markets defaulted following the 2008 financial crisis.
These entities, led by Loreley Financing No. 3, invested a total of $163 million in the CDOs, which they now claim were used as a “private dumping ground for rapidly deteriorating assets” that Wachovia wanted to get rid of.
Wells Fargo is the successor in interest to Wachovia, having purchased the bank in 2008 in an FDIC-brokered deal following Wachovia’s heavy losses in the subprime mortgage crisis.
The Second Circuit upheld the plaintiffs’ primary fraud claim last year, and Wells Fargo did not attempt to dismiss that count again on remand.
However, Wells Fargo sought to dismiss the complaint’s claims for rescission, aiding and abetting fraud, and conspiracy to commit fraud.
U.S. District Judge Richard Sullivan granted the motion on the conspiracy claim, but upheld plaintiffs’ other causes of action Thursday.

Read on.

Oregon Treasurer: Oregon trust funds will press for structural reforms at Wells Fargo



As a significant shareholder, Oregon trust funds will press for structural reforms at Wells Fargo

Oregon Treasury engages with public companies to enhance long-term value and drive sustainable returns

SALEM – State Treasurer Ted Wheeler announced today that Oregon trust funds, which hold substantial shares of Wells Fargo & Co., will press for management structure and executive compensation reforms in the wake of a scandal in which company employees created millions of fraudulent accounts, and then received bonuses as a reward for their fraudulent activities.

The Oregon State Treasury and Oregon Investment Council engage directly with public companies and also seek change via proxy votes to drive more responsible practices, enhance long-term value and increase the likelihood of sustainable returns.

“Ethics matter,” said State Treasurer Ted Wheeler, who also sits on the Oregon Investment Council. “As a responsible shareholder, we will hold corporate leadership accountable and demand reforms including a ban on bonuses connected to fraud.”

Read on.

Ditech Financial fined $1.4 million for “abusive debt collection practices” in Massachusetts

Ditech Financial will pay $1.4 million to the state of Massachusetts to settle charges that the company engaged in “abusive debt collection practices” by excessively calling borrowers to collect payment as well as not property notifying some borrowers of their mortgage information, the state’s attorney general announced this week.

According to the announcement from Massachusetts Attorney General Maura Healey, Ditech Financial, formerly known as Green Tree Servicing, agreed to an “assurance of discontinuance,” which requires Ditech to stop making “excessive debt collection calls” to consumers.

The order also requires Ditect to provide written notice regarding the borrowers’ right to receive detailed information about any debts that Ditech sought to collect, both of which are required by state law.

The order settles claims uncovered by an investigation by Healey’s office into Ditech’s debt collection practices in the state.

Healey’s office alleged that since 2012, Ditech “routinely violated” the state’s laws.

According to Healey’s office, Ditech employees allegedly called borrowers far more often on a daily basis than allowed by state law excess of the number of calls permitted by state law. In some cases, Ditech allegedly called the same borrower as many as 12 times in a single day.

The AG’s Office also found that Ditech failed to notify borrowers of their right to seek detailed information regarding their mortgage debt.

Under Massachusetts state law, mortgage borrowers have the right to verify the amounts owed on a debt in collection and to confirm that the party seeking to collect on the debt has the legal right to do so.

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