Wells Fargo Agreed to Pay $3 Billion Fine to Resolve Fake Accounts Scandal

Wells Fargo Agreed to Pay $3 Billion Fine to Resolve Fake Accounts Scandal

American officials said on Friday that Wells Fargo & Co has decided to pay $3 billion to settle civil and criminal investigations into fraudulent sales practices. Even more, the company has confessed to forcing workers in a bogus-accounts scandal. The latest effort of the company reveals completion of the eventual major significant probes pending over the Bank. Since the emergence of fake-accounts scandal, 2016, the Bank based in San Francisco has disbursed billions as fine to government and state regulators. Apart from this, it has re-organized the board of directors along with top-level executives and two CEOs. Analysts anticipate, as an effort to heal from the fake account scandal, the Bank could layoff around 20,000 employees.

US Attorney for the Central District of California Nick Hanna said the instance reveals a complete lack of management at various levels within Well Fargo & Co. Nick added they are expecting a $3 billion fine, including the structural and personnel variations at the Bank, will make sure that such behavior will not happen again. The Department of Justice said the amount would address civil and criminal obligations from the bogus accounts scandals that happened between 2002-2016. From the payment, an amount of $500 million will go to the SEC (Securities and Exchange Commissions). Later the agency will allot those payments to financiers who have faced harm because of the Bank’s conduct.

As a part of the settlements, the country’s fourth-largest bank has acknowledged collecting millions of dollars in interest and fees unnecessarily. Even more, it has admitted to illegally misusing the sensitive personal data of customers and damaging their credit ratings. On the other hand, Well Fargo & Co. reported net earnings of over $19 billion in the previous year. The Bank has always stayed deep-rooted in regulatory supervision since 2016. It came under intense scrutiny when the CFPB (Consumer Finance Protection Bureau) and other federal bodies charged the company for making millions of fake accounts to achieve sales ration. Above all, the settlement of the multi-agency probe marks crucial importance for Scharf, Wells Fargo’s new CEO, who joined the Bank in September. He said they are making all essential resources to make sure that nothing like this occurs again.