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Wells Fargo eyeing huge potential litigation bill

Thursday, November 3, 2016 8:38
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Embattled San-Francisco-based banking titan Wells Fargo & Co (NYSE:WFC) said legal costs associated with investigations and regulations could cost it up to an eye watering US$1.7bn.

The group said the figure was at the “the high end” of reasonably possible potential litigation losses” above what was already “probably or estimable”.

It’s been seven weeks since the group admitted creating up to 2mln fake accounts and firing 5,300 workers since 2011, which led to the retirement of chief executive John Stumpf.

The US Securities and Exchange Commission is investigating Wells’ sales practices and there are also ongoing probes by the US Justice Department and state attorneys general.

The company had already agreed to pay a $185mln penalty as part of a civil settlement.

The scandal erupted after it emerged retail bankers opened the fraudulent accounts without customers’ permission after facing pressure to meet aggressive sales targets.

Story by ProactiveInvestors


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