Massachusetts latest to bar Wells Fargo as underwriter
REUTERS 3:23 PM ET 10/18/2016
By Hilary Russ
Oct 18 (Reuters) - The state of Massachusetts will stop using Wells Fargo & Co(WFC) as a bond underwriter for one year, joining a growing list of state and local governments to suspend business with the bank after revelations it opened millions of unauthorized accounts.
Massachusetts Treasurer Deborah Goldberg instructed her staff late on Monday to immediately remove Wells from the state's approved list of underwriters for a term of one year, her spokeswoman said on Tuesday.
Compared to other states, Massachusetts' exposure to the bank is "extremely limited," but Goldberg "isn't convinced that Wells Fargo(WFC) has grasped the level of seriousness of their actions nor have they addressed systemic failures within their organization," spokeswoman Chandra Allard said in an email.
Last month, the bank agreed to pay a $190 million settlement over its staff opening as many as 2 million accounts without customers' knowledge. The misconduct triggered a raft of federal and state investigations and cost former chief executive and chairman, John Stumpf, his job when he resigned last week.
Earlier this month following the scandal, Massachusetts, as well as Oregon and the city of New York, said they were reviewing their business relationships with the firm.
The backlash has since spread. On Friday, Ohio said it would ban state business with Wells for a year, following the city of Chicago and the states of Illinois and California. (Reporting by Hilary Russ; Editing by Meredith Mazzilli)
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