Wells Fargo's results were boosted by $1.1 billion from the sale of its institutional retirement and trust business. “Geeeez,” one of the security officials later said. Chief among them is Carrie Tolstedt, who as head of the Wells Fargo community bank division allegedly oversaw the conditions that led to the scandal. In the filings, prosecutors described how, even after some Wells Fargo executives tried to curb the sales abuses, the bank hid the problem from investors by changing its public descriptions of its sales practices over several years. Wells Fargo has yet to resolve a trio of investigations launched in 2016 by the SEC, Justice Department, and Labor Department. His seventh book, “Iron Empires: Robber Barons, Railroads, and the Making of Modern America,” has just been published by Houghton Mifflin Harcourt. Here are three that didn’t survive. The company says it may face another $3.9 million in costs related to the scandal. Some reached Stumpf and his underlings directly. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. Now the bank is grappling with the lingering consequences. Column: Even a $1-billion fine won’t fix what’s broken at Wells Fargo. Since taking over in October, Mr. Scharf has not offered any hints about when that goal might be accomplished. Cal State schools see enrollments surge during COVID-19 pandemic. The bank has partially remade its board, but six directors who were serving during the scandal and in its aftermath, two as far back as 2009, are still in place. She appeared as “Executive A,” who the filings said was the “senior executive vice president in charge of the community bank” from 2007 to 2016, a position Ms. Tolstedt held during that time. The few employees and managers who did meet sales goals — by any means — were held up as examples for the rest of the work force to follow. Wells Fargo continues to spend heavily despite pressure from Wall Street to get costs under control. That gap has vanished in recent quarters. In fact, the sales force was ripping off customers, sometimes saddling them with unwarranted fees and even damaging their credit reports. Column: The Wells Fargo board is still getting a pass for failure. Purdue’s massive opioid settlement is tangled in a bankruptcy court fight. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC 2018 and/or its affiliates. L.A. Affairs: When ‘corona-dating’ gets me down, I remember what mom said. To recap, sales employees at Wells Fargo’s community bank — that is, the retail arm responsible for consumer savings and checking accounts and credit and debit cards — were discovered to have opened millions of unauthorized accounts and issued millions of unauthorized cards to meet punishing sales goals, on pain of termination. Follow him on Twitter at twitter.com/hiltzikm and on Facebook at facebook.com/hiltzik. Starting in 2012, the OCC says, the bank began monitoring the sales force for misconduct. “This case illustrates a complete failure of leadership at multiple levels within the bank,” Nick Hanna, U.S. attorney for the Central District of California, said in a statement. The OCC is seeking $25 million from Tolstedt and a total of $10.5 million from the four others. Wells Fargo not only caused serious harm to its own customers, but serious financial harm to itself, the OCC observes. Wells Fargo rewarded shareholders by repurchasing $7.5 billion of stock during the third quarter. The bank is still trying to regain its reputation. With business travel down 90%, by some tallies, companies are figuring out how to do without it. The document also points to the consequences of doing so; Wells Fargo, the OCC observes, has struggled to regain its reputation for integrity while also paying hundreds of millions of dollars in legal settlements and administrative costs and also facing potentially billions more. Wells Fargo reported tepid loan growth during the third quarter, although the bank didn't blame the asset cap. Stocks closed mostly higher on Wednesday, helped by big technology stocks, but news of tighter restrictions in New York State helped dent an earlier rally. Investors feared a sharper drop. According to the papers, Executive A ignored concerns that other executives raised about cross-selling, lied to regulators and Wells Fargo’s board, and tightly controlled the bank’s public disclosures. “So I had a very negative personal reaction. Friday’s $3 billion penalty, while large, is not record breaking. ‘I just want someone I can sit with and talk to on the couch and have a great time,’ I’d often remarked to my friends about what I’m looking for in a relationship. New York (CNN Business)Wells Fargo's fake-account scandal continues to haunt the big bank, exacerbating headaches caused by shrinking interest rates. Since the allegations came to light in a settlement with California authorities and the Consumer Financial Protection Bureau, the bank has also admitted it charged mortgage customers unnecessary fees and forced auto loan borrowers to buy insurance they did not need. Net interest margin, a closely watched measure of profitability, fell sharply. The bank's non-interest expense climbed 10% during the quarter to $15.2 billion. Its perks include: movie theater, sports court, wine cellar guarded by a candy machine. One useful rule of thumb when it comes to business scandals is that they often seem to get worse after the initial disclosures, even after a string of “official” investigations. The $1-billion fine levied Friday by federal regulators on Wells Fargo and Co. for its string of customer-abuse scandals certainly sounds like a big number. Wells Fargo, staggered by a scandal tied to bogus consumer accounts and allegations of identity theft, is responding like most big companies with a sullied reputation: with an ad campaign promising to “make things right” for its alleged victims, without being too specific about how. These companies are trying to win back your trust, Internet mocks McDonald's new meatless burger, See Apple's new Macbooks with the M1 chip, Dr. Gupta talks to Pfizer CEO about vaccine effectiveness, Watch: People travel in Virgin Hyperloop for the first time, An online movement has these Trump supporters convinced the election was stolen, See how Fox News changed tune on accepting election results, Twitter shuts down Steve Bannon account after talk of beheading, Fox News anchors are questioning their own network's election calls, Another 751,000 Americans filed first-time jobless claims, False video of Biden aims to make him look unfit for office. Part of Friday’s deal, which includes a settlement with the Securities and Exchange Commission, is a deferred prosecution agreement, a pact that could expose the bank to charges if it engages in new criminal activity. A former Wells Fargo chief executive, John G. Stumpf, agreed to pay $17.5 million. “Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way.”. That’s exactly what the travel industry fears most. In court papers, prosecutors described a pressure-cooker environment at the bank, where low-level employees were squeezed tighter and tighter each year by sales goals that senior executives methodically raised, ignoring signs that they were unrealistic. The practice went on for about 14 years, beginning as early as 2002. The money is included in the $3 billion settlement total. Lending profit dropped 8% during the third quarter at Wells Fargo. As part of its agreement with the S.E.C., the bank will set up a $500 million fund to compensate investors who suffered when Wells Fargo failed to inform them that its community banking business was not as strong as the fake accounts made it seem. The bank has been aggressively leaning on share buybacks to pad its results. “We are committing all necessary resources to ensure that nothing like this happens again,” Wells Fargo’s chief executive, Charles W. Scharf, said in a statement on Friday. “All I could do is shake my head.”. Our customers and you all deserved more from the leadership of this company.”. One after another, some of the most embattled names in corporate America are racing to raise easy money while they can. Morningstar: Copyright 2018 Morningstar, Inc. All Rights Reserved. But it designed the monitoring to minimize its findings and looked only for certain misdeeds, avoiding numerous other red flags of unauthorized account-opening. Sanders said Wells Fargo is particularly exposed to these interest rate problems because of its reputation difficulties. "It does reflect something that is a few years old at this point. In 2012, when the country’s five largest banks paid a total of $26 billion to state and federal authorities to settle investigations into their mortgage lending practices in the years leading up to the 2008 financial crisis, Wells Fargo’s portion was $5.35 billion. Around the same time, however, the company asserted in court that its statements that it was working to “restore trust” among its customers and “trying to be more transparent” about its scandals — statements made by its then-CEO Tim Sloan — were just “puffery.”. L.A. County declares new coronavirus surge, sparking increased alarms. The bank reached a settlement with federal prosecutors and the Securities and Exchange Commission after abusing customers. Purdue Pharma’s massive settlement over claims it helped spark the opioid crisis is facing pushback in federal court, creating a potential stumbling block for the landmark deal. Tolstedt and other executives kept dismissing the seriousness of the misconduct, but it appears that at least one board member wasn’t fooled by a presentation by Tolstedt in October 2015. On the surface, the Federal Reserve seemed really to lay the hammer on Wells Fargo & Co. for its accounts scandal and serial wrongdoing. Wells Fargo did not detail what sparked the legal hit other than to say it is related to its previously disclosed retail sales practices trouble broadly. They said the settlement also did not include similar conduct that fell outside the 14-year period. Friday’s fine is not even the largest against Wells Fargo. To attract business, the bank needs to pay higher deposits than its rivals. The unauthorized-accounts scandal at Wells Fargo is an exemplary case, and we don’t mean that as a compliment. His first task is taming Washington, Consumers are still spending, says JPMorgan Chase CEO Jamie Dimon. Wells Fargo’s profits last year totaled nearly $20 billion. Two other former executives also settled with the OCC for a combined $3.5 million. The mortgage and auto loan claims are not part of Friday’s deal, and Justice Department officials declined to comment on whether they intended to take more action against the bank. U.S. companies are stockpiling cash before COVID winter hits. Tolstedt acted appropriately and in good faith at all times, and the effort to scapegoat her is both unfair and unfounded,” her lawyer Enu Mainigi said in an email to The New York Times. The outlines and many details of this affair have been reported before, starting with The Times articles in 2013. For much of that period, top executives, including Stumpf, were well aware of the problem. Carrie L. Tolstedt, Wells Fargo’s former head of retail banking, is contesting a $25 million fine. As the OCC observes, the bank’s competitors have experienced healthy growth in their stock prices since the first Wells Fargo settlement in September 2016, while Wells Fargo shares have barely budged. That’s on top of $41 million in equity awards he forfeited when he stepped down from Well Fargo in 2016, and another $28 million in compensation the bank clawed back from him in the wake of the scandal. Tolstedt and Stumpf deflected questions about the scandal by continuing to ascribe it to a few “bad apples” on the sales force. The legal hit underscores Wells Fargo's struggles to move past a scandal that first came to light. So far, the company has paid $70 million to law firms to investigate the scandal, $185 million in settlements with government agencies, $97 million to consultants tasked with fixing the problem, and $142 million in settlements with customers. Despite its reputation issues, Wells Fargo is still recruiting new customers. She showed “no recognition ... of the extent or seriousness of the matter,” the director told the OCC. “Employees were referred for investigation only if they engaged in sales practices misconduct so frequently” that they ranked as the “top 0.01% or 0.05% of total offenders.” That meant that although 30,000 employees per month exhibited suspect activity, only as few as three per month were investigated.