Wells Fargo (NYSE:$WFC) saw its stock plummet on Friday, August 4th. As of 3:53 PM EDT, the bank’s stock has decreased by 0.96%. This was mainly due to a filing to the U.S. Securities and Exchange Commission that revealed that Wells Fargo could have more unauthorized accounts opened than previously thought.
A few months ago, it was reported that Wells Fargo employees had been opening unauthorized accounts for its customers in order to meet the demanding sales quota the company had set. Other employees who had tried to report the incident were fired and even blacklisted from working at other banks. Even worse, it was revealed that the then-CEO of Wells Fargo had known about the unauthorized accounts and did not do anything to stop it. Now, the bank is facing the repercussions.
“We expect that our review of the expanded time periods … may lead to a significant increase in the identified number of potentially unauthorized accounts,” Wells Fargo’s filing to the SEC read. “However, we do not expect any incremental customer remediation costs as a result of these efforts to have a significant financial impact on the Company.” However, the bank also said in the same filing that the legal costs needed to deal with the scandal could surpass the previously expected $3.3 billion it had already prepared.
In a separate press release, newly-appointed Wells Fargo CEO Tim Sloan stated, “To regain the trust we have lost, we must continue to be transparent with all our stakeholders and go beyond what has been asked of us by our regulators by reviewing all of our operations – leaving no stone unturned – so we can be confident we have done all the we can do to build a better, stronger Wells Fargo.”
As such, the bank has broadened its investigation of the sales scandal. Now, it will be reviewing all accounts opened from January 2011 to September 2016. Additionally, accounts from 2009 to 2010 will be voluntarily reviewed by the bank. The reviews of these accounts is expected to be completed by the end of the third quarter in 2017.
Besides Wells Fargo’s reviews, the Consumer Financial Protection Bureau (CFPB) has started investigating whether or not Wells Fargo customers were impacted by the freezing as well as closing of consumer deposit accounts, according to the filing to the SEC.
Wells Fargo has also recently been in a separate scandal for charging car-owners with auto insurance without their knowledge and is currently being investigated for that as well.
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