The number one bank in the world, Wells Fargo, has come under fire for opening fake accounts to meet sales quotas.
The Wall Street Journal reported Wednesday that Wells Fargo is being investigated by federal prosecutors in the U.S. Attorney's Office in the Southern District of New York and the Northern District of California, citing unnamed sources.
More than 2 million fraudulent accounts, including debit and credit cards, were opened in customers’ names without their knowledge. Wall Street Journal reporter Emily Glazer said the illegal practice has gone on for at least 5 years.
Now the bank has been ordered by regulators to pay a fine of $185 million. Some 5,300 employees have been fired over the scandal, but the court of public opinion wants those at the top to be made accountable as well. Specifically, they are outraged that Carrie Tolstedt, one of Wells’ top executives over retail banking—the division involved in illegal account opening—got to retire in July and walk away with a package worth more than $125 million.
Although a significant amount of money, some say the $185 million fine is a “drop in the bucket” for Wells, who boasts annual revenues of $90 billion. So far only civil charges have been filed.
“This was a civil action, so right now we’re not expecting to hear anything criminal,” Glazer said. “I wouldn’t anticipate anything criminal in the near future.”
"Can you believe the Wells Fiasco?" community banker Tom McGraw, CEO of First National Bank of Northern California. "Management pushes unachievable quotas, 5,000 employees resort to fabricating accounts and are then fired. What about the management that created these unrealistic goals?
Wells Fargo CEO John Stumpf will appear before the Senate Banking Committee on Sept. 20 to discuss the bank's sales practices. He apologized to customers and said the bank would be eliminating sales goals and would shift focus from sales to customer satisfaction.
“Last week’s news did not reflect Wells Fargo at its best,” Stumpf said. “Your trust and confidence in us is something we hold near and dear.”
Wells Fargo customers are advised to check statements for any suspicious or superfluous accounts on and offline.