NEW YORK–(BUSINESS WIRE)–The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, has opened an investigation into potential Financial Industry Regulatory Authority (FINRA) sales practice violations by Wells Fargo Advisors and its financial advisors for activities similar to those recently reported in The Charlotte Observer. According to reports, Wells Fargo (NYSE:WFC) used aggressive “cross-selling” tactics with its bank clients in order to open investment accounts through its brokerage firm, Wells Fargo Advisors. According to a former bank branch manager, new account goals had minimum sales requirements across all product lines which “became a living nightmare” for their branch to meet.
According to K&T founder, Lawrence L. Klayman, “Our investigation focuses on whether Wells Fargo Advisors had bank customers steered to open investment accounts with the brokerage firm through high pressure sales tactics motivated by contests which paid incentives to the referring employees.” Mr. Klayman continues, “Wells Fargo touted the contributions of ‘cross-selling’ to the bank’s profitability in public pronouncements to shareholders. In the pursuit of profits, investor rights may have been violated resulting in unsuitable investment recommendations.” Mr. Klayman explains, “Wells Fargo Advisors and its parent Wells Fargo bank, may have failed to supervise the ‘cross-selling’ activities of their bank employees and financial advisors and should be held responsible.”
An attorney representing a Wells Fargo employee told 5 EYEWITNESS NEWS the bank’s “rampant scandals” may’ve cost his client and countless others a stable retirement. That lawyer filed a federal class-action lawsuit against Wells Fargo late last week on behalf of client Francesca Allen.
The lawsuit, filed in Minnesota, comes weeks after regulators found that Wells Fargo employees had secretly created millions of unauthorized accounts, without their customers knowing it, since 2011. It alleges that the “criminal epidemic was created by Wells Fargo’s senior executives,” and in doing so, attorney Adam Levitt argues that bank executives put their employee’s retirement plans at risk because their plans are largely tied to Wells Fargo stock.
“For Wells Fargo and its executives to knowingly hurt their employees the way that they have in this respect and others is simply reprehensible,” said Levitt, the head of Consumer Protection and Product Liability Litigation at Grant & Eisenhofer P.A.
Nationstar Mortgage Holdings and Bank of America have been hit with a proposed class action accusing them of inflating the amounts owed by mortgageholders when their loans matured.
Filed on Friday in federal court in Fresno, California, the lawsuit seeks damages for borrowers nationwide who were allegedly charged “extortionate” amounts not listed on their mortgage payment schedules, putting them at risk of foreclosure.
You can now add Seattle to the growing list to Wells Fargo’s headaches…
The City of Seattle is breaking ties with Wells Fargo after revelations that the bank opened accounts nationwide without the knowledge of the account holders.
Seattle city leaders were considering taking out a $100 million loan from Wells Fargo to cover a Seattle City Light bond. In a letter Friday, city leaders say they’re calling off the contract before it’s finalized this month.
Seattle Mayor Ed Murray, Council President Bruce Harrell and Tim Burgess, the chair of the council’s finance committee, sent the letter.
Wells Fargo is already facing heat from the House of Representatives, the Senate, theConsumer Financial Protection Bureau, the Office of the Comptroller of the Currency, various states and municipalities, and maybe even the Department of Justice for the fake account scandal surrounding the bank, and now the bank has more trouble.
According to a report from the Philadelphia Business Journal, a group of nuns and other religious investors are calling on Wells Fargo to cough up more information about the bank’s business practices and want structural changes to the bank’s leadership structure.
From the Philadelphia Business Journal report:
The Interfaith Center on Corporate Responsibility filed a shareholder resolution on Monday that called for the San Francisco-based bank to report on the root causes of the fake accounts scandal. Last month, Wells Fargo admitted that its employees opened as many as 2 million checking, savings and credit card accounts without the customer authorization in order to meet sales goals.
The ICCR, a group of asset managers and religious leaders that pushes responsible investing and corporate governance, also demanded a plan for improved oversight from Wells Fargo and suggested separating the chair of the board of directors and CEO roles.