TRENTON, N.J. (CN) – Fired in the wake of Wells Fargo’s mortgage-kickback scandal, nine former staffers claim in court that the supervisors who instructed the illegal activity kept their jobs.
The lawsuit in Mercer County Superior Court comes just over two years after Wells Fargo paid $35.7 million to settle charges by the Consumer Financial Protection Bureau.
Regulators said that Wells Fargo’s loan officers were accepting cash and other kickbacks in exchange for referrals from General Title, a realty title insurance company that shuttered in 2014.
Led by Egg Harbor resident Jeffrey Bellak, nine former Wells Fargo home-mortgage consultants from that era say the kickback practices were standard operating procedure, and that Wells Fargo switched to a new title company in 2013.
“Having paid an enormous fine for its illicit ‘leads’ arrangement with Genuine Title, and having pledged as part of the settlement to desist, Wells simply discontinued its relations with Genuine and substituted Patriot Land Title,” the March 6 complaint states.
Bellak and the other fired officers say Wells Fargo chose them randomly as sacrificial lambs a few months after settling with the CFPB.
“In order to create for the CFPB the false appearance of having pursued a true internal investigation, resulting in the removal of all personnel responsible for the prior violations, [Wells Fargo] arbitrarily selected the plaintiffs for termination,” the lawsuit states.
The president of the Federal Reserve Bank of New York told the Banking Standards Board in London on Tuesday that he sees quite a few similarities between the Wells Fargo fake account scandal and the subprime mortgage crisis of the late 2000’s.
New York Fed President William Dudley, in a speech entitled “Reforming Culture for the Long Term,” said that the goal-driven sales culture at Wells Fargo, which drove 5,000 of the bank’s former employees to open as many as 2 million accounts without authorization in order to get sales bonuses, reminded him of the environment that led to the mortgage crisis.
A very poor message to send to the shareholders when the bank is dealing with the ongoing sales scandal…
Florida’s Sawgrass Marriott Golf Resort & Spa offers the kinds of amenities you’d expect from a swanky venue overlooking the Atlantic coast: two championship golf courses, villas with private balconies, therapy baths and massage lessons.
It’s also where Wells Fargo will hold its annual meeting for shareholders next month, the San Francisco bank said in a regulatory filing last week. It will be the first such gathering since regulators fined Wells in September over its sales scandal.
But at a time when Wells is trying to move past the scandal, the choice of the Ponte Vedra Beach venue is sparking fresh criticism from shareholders already angered by revelations of its sales practices.
“This is an indication that the company didn’t assess the value of being more humble in light of the scandal and are asking shareholders to find a place to stay that is off the beaten path because they don’t want to be exposed to protesters,” said Sister Nora Nash, a nun with the Sisters of St. Francis of Philadelphia, which owns Wells Fargo shares.
“It’s a very poor public message of visibility at a time when the company should begin to display a new culture that it not insular,” she said.
It still happening..
The end of John Barber’s unpleasant foreclosure process seemed to be in sight.
Barber had arranged to sell his Easton home through a short sale, which occurs when a bank approves a sale for less than the mortgage balance.
He started packing in anticipation of moving out but said some treasured items, including a coin collection and an antique firearm, were stolen when the bank took the premature step of sending a company to secure the home while he still was living there.
Barber notified police and sued Wells Fargo. The lawsuit alleges he “discovered that his home had been broken into, the locks changed, the premises ransacked, and a large quantity of personal property belonging to him was missing.”
Wells Fargo got some good press earlier this month when the chairman of the board stomped his foot, thrust an index finger into the air, and declared the bank would award no cash bonuses to eight top executives for 2016, collectively depriving them of $32 million in compensation. It was a rare and dramatic showing of spinal integrity for the red stagecoach. Of course, as you may recall, the announcement included the explicit proviso that no one did anything improper, necessarily. But the board didn’t need to use words to communicate its displeasure – cash would do just fine.
But something funny happened in the intervening weeks: Those callously withheld cash bonuses miraculously transformed themselves into equity awards. CEO Tim Sloan, whose overall pay increased 17 percent to $13 million, saw his stock award grow $2.5 million as his $1 million cash bonus from 2015 disappeared. CFO John Shrewsberry’s $850,000 cash bonus vanished as his stock award grew by $1 million, according to Wells Fargo’s 2017 proxy filing.
Wells Fargo & Co. has pledged to reimburse customers harmed when its employees opened unauthorized accounts in their name — but it has been unwilling to allow lawsuits for damages, which are barred by the bank’s standard arbitration clause.
On Tuesday, Rep. Brad Sherman (D-Sherman Oaks) reintroduced a bill he wrote last year that would allow customers to have their cases heard in court.
Portland Mayor Ted Wheeler says the city will seek alternatives to depositing city money at Wells Fargo in an effort to stop providing financial support to a bank that is financing the controversial Dakota Access Pipeline.
He made the announcement Tuesday day on Twitter.
The city will choose its next bank using criteria that will include socially responsible business practices, Wheeler wrote.