Just when you thought that after the last criminal offense by Wells Fargo (which as a reminder was pushing customers into higher-fee retirement accounts), surely there was no way Warren Buffett’s favorite criminal organization would be caught again engaging in some even more bizarre criminal activity.
Alas, it was not meant to be as Wells somehow always finds a way, and moments ago the WSJ reported that in the latest scandal involving America’s largest mortgage lender, “some employees” in Wells Fargo’s business banking, aka “wholesale” unit and is separate from Wells’ retail division, improperly altered information on documents related to corporate customers without their knowledge.
The Information adjusted by Wells employees varied from social security numbers to addresses to dates of birth for people associated with business-banking clients, with the bulk of incidents reportedly taking place in 2017 and early 2018, as Wells Fargo was trying to meet a deadline to comply with a regulatory consent order related to the bank’s anti-money-laundering controls.
In other words, to comply with regulations against fabricating client data, Wells… fabricated client data.
The employees were also working to get documents in order prior to new requirements from another regulator for disclosures related to proof of beneficial ownership of businesses, the WSJ added. Wells Fargo only became aware of the behavior in recent months from employees and is still investigating the matter.
While a Wells Fargo spokesman told WSJ the bank doesn’t comment on regulatory matters, he said that “this matter involves documents used for internal purposes,” and added that “no customers were negatively impacted, no data left the company, and no products or services were sold as a result” although we are confident the the upcoming congressional hearings may reveals something else.
“Over the past several months we’ve built more robust internal processes that reinforce our values, and if we find any situations where behavior violates those values, we take swift action to correct.”
Processes, such as this one, in which the bank fabricated corporate customer data.
The altering of information within the business-banking division of Wells Fargo, which serves small firms with annual sales ranging from $5 million to $20 million, comes as the bank is continuing to grapple with the fallout from the sales-practices scandal that erupted in September 2016. That involved bank employees fabricating information to open as many as 3.5 million accounts without customers’ knowledge or authorization.
Regulators subsequently sanctioned Wells as more problems have emerged. Wells Fargo agreed to a $1 billion settlement with two of its main regulators in April, which forced the bank to adjust reported first-quarter earnings by $800 million. The settlement focused on risk-management failures that led to improper charges to mortgage and auto-lending customers.
Following the news, Wells Fargo stock has slumped, and is the worst performer in the KBW bank index, falling as much as 1.5% in early trading.
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