What's Next for Wells Fargo?
DOW JONES & COMPANY, INC. 12:59 PM ET 10/13/2016
Symbol Last Price Change
WFC 44.465up -0.855 (-1.89%)
QUOTES AS OF 01:01:53 PM ET 10/13/2016
The sales scandal at Wells Fargo & Co.(WFC) has already caused the bank to replace its CEO, overhaul some branch practices and endure scathing critiques on Capitol Hill. But the pain likely isn't over. What could happen next? Here are some of the shoes that could still drop:
*Justice Department: Federal prosecutors in New York, California and North Carolina are looking into sales practices at Wells Fargo(WFC), The Wall Street Journal has previously reported. They have yet to decide if any case would be civil or criminal, or if there is a case.
*State inquiries: Connecticut Attorney General George Jepsen has opened an investigation of the bank, a spokeswoman said Thursday. She said the attorney general has "substantial concerns" about Wells Fargo's(WFC) actions and would examine whether state laws had been broken.
Illinois Attorney General Lisa Madigan's office has asked for a meeting with Wells Fargo(WFC), her office said late Wednesday . A spokeswoman said the office was concerned by reports that Wells had opened unauthorized accounts before 2011, since last month's settlement went back only through that year.
Florida Attorney General Pam Bondi's office said last month it had reached out to both the Consumer Financial Protection Bureau and the bank. Other states are monitoring the matter and could take a higher-profile role in the future.
*Lawmakers: The House Financial Services Committee is conducting its own investigation. It plans to interview more Wells Fargo(WFC) executives and is collecting more information from the bank and regulators about when the wrongdoing was discovered. Rep. Jeb Hensarling (R-Texas), the committee chairman, said there could be more hearings. The committee has asked for interviews with new CEO Timothy Sloan, Chief Financial Officer John Shrewsberry, former retail bank head Carrie Tolstedt and Chief Risk Officer Michael Loughlin.
Democrats on the Senate Banking Committee have also asked the bank for more information, including state-by-state data on affected customers and how the bank might fix credit scores for harmed customers.
*Local governments: California, Illinois, Chicago, and Seattle, among others, have said they will curb their business relationships with Wells Fargo(WFC). The bank has said it is disappointed in those decisions, noting that its municipal relationships are separate from the retail bank.
*SEC: Democratic lawmakers asked the Securities and Exchange Commission to investigate whether the bank misled investors by not disclosing the sales problems sooner. The bank has said that the problems weren't material.
*DOL: The Labor Department is conducting a review of the bank's treatment of employees, including whether Wells Fargo(WFC) skirted overtime rules. The move follows a letter from Democratic senators urging an investigation.
*Internal investigation: Wells Fargo's(WFC) board is also conducting its own inquiry about what went wrong, and the bank is reviewing all accounts back to 2009. (The settlement went back to 2011.) John Stumpf, who stepped down as CEO on Wednesday, was asked at the House hearing if the bank would go back further.
*Executive pay: The board already took back $41 million of Mr. Stumpf's compensation, but he's still eligible for about $120 million in total compensation earned over his career, according to an independent analysis conducted for The Journal. The board could choose to claw back more of his pay, according to a person familiar with the matter. It could also look to do so for other executives, the person added.
*Private lawsuits: Class-action lawyers have been busily recruiting both employees and investors who say they were wronged, and some lawsuits have already been filed.
*Shareholders: The CtW Investment Group has asked the bank for shareholders to be allowed to vote next spring on changes including two new board members. Shareholders have until mid November to submit other proposals for next year's annual meeting.
(END) Dow Jones Newswires
10-13-161259ET
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