Wells Fargo faces scrutiny over malpractice

Dhaka,  Monday,   2016-09-16
Published : 16 Sep 2016, 14:35:14 | Updated : 16 Sep 2016, 14:36:32

Wells Fargo faces scrutiny over lack of sales scandal disclosure

Wells Fargo faces scrutiny over malpractice
A phantom account scandal at Wells Fargo & Co has put the US bank's disclosure policies under a harsh spotlight.

Despite press reports that a federal regulator and the Los Angeles prosecutor were investigating sales practices at retail branches of the San Francisco-based lender, the bank, which agreed to a $190 million settlement, gave investors no indication of the scale of the problem.

The surprise spooked investors and has lopped roughly $19 billion off its market value since the probe disclosed last week that Wells employees had created roughly 2 million accounts for customers without their knowledge in order to meet internal sales targets. The bank has fired 5,300 people over the scandal.

While the settlement barely makes a dent in the $23 billion of profit the bank earned last year, the scandal's aftermath has caused a 7.5 per cent drop in Wells' stock compared with a roughly 2.4 per cent decline for the Dow Jones US Banks Index, according to Reuters.

- TM
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