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Wells Fargo Under Scrutiny

Wells Fargo Under ScrutinyWells Fargo Under Scrutiny

Federal prosecutors are investigating Wells Fargo, after the bank was fined for opening unauthorized accounts.

The Wall Street Journal report, citing sources, said that the investigation is in its early stages and that prosecutors have yet to decide whether they would pursue a civil or criminal case, should they choose to. The bank has been issued a supboena, people familiar with the matter said, CNBC reported.

Late Wednesday, Reuters also reported that federal prosecutors are investigating the bank regarding its sales practices.

Shares of Wells Fargo closed down 0.94% on Wednesday.

Wells Fargo declined to comment to CNBC.

Officials announced last week that Wells Fargo will pay $185 million in penalties and $5 million to customers for opening fee-generating accounts without authorization. Over a five-year period, 5,300 Wells Fargo employees were fired over the practice cited by the Consumer Financial Protection Bureau, CNBC confirmed. The activity occurred in the company’s community banking division.

On Tuesday, CEO John Stumpf said he holds himself accountable for the account opening practices but does not plan to resign.

“I think the best thing I could do right now is lead this company, and lead this company forward,” he told Jim Cramer in an interview on “Mad Money.” Stumpf said that the company is sorry and deeply regrets “any situation where a customer got a product they did not request.”

Thousands of staffers who were fired in recent years after opening unauthorized customer accounts represented under-performing employees struggling to meet goals, Wells Fargo CFO John Shrewsberry said Tuesday.

“These bad practices were not a revenue-generating activity,” Shrewsberry said. “It was really more at the lower end of the performance scale where people apparently were making bad choices to hang on to their job.”

 

Financialtribune.com