UPDATE 2-Wells Fargo starts settlement talks with Justice Dept, SEC

A Wells Fargo bank sign is pictured in downtown Los Angeles, California, U.S. August 10, 2017. REUTERS/Mike Blake

NEW YORK (Reuters) – Wells Fargo & Co said on Wednesday that it entered preliminary settlement discussions with the U.S. Department of Justice and the Securities and Exchange Commission over previously disclosed probes into its sales practices.

In an annual regulatory filing, the bank said it raised the maximum figure it could exceed its legal reserves by as much as $2.7 billion, an increase of $500 million since it last reported the number in November.

The bank said it raised the figure, which is called a reasonable possible loss and is separate from the bank’s legal reserves, because of several legal matters, including ones related to its sales practices.

Wells Fargo has faced a long list of penalties related to a sales scandal beginning in 2015 which initially related to employees in the consumer bank opening millions of accounts in customers’ names without their permission. It has since spread to other bank businesses, from mortgage banking to auto lending.

To date the bank has paid out over $4 billion in settlements and fines related to the scandal and has faced probes from the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Los Angeles city attorney and the New York attorney general.

Lingering investigations by the SEC, the Department of Justice and the Department of Labor represent the largest open questions hanging over the bank’s head.



Please enter your comment!
Please enter your name here