New York Attorney General Barbara D. Underwood announced today that Wells Fargo will pay a $ 65 million fine after an investigation into the bank's fraudulent statements to investors regarding its "cross-selling" business model. products.
"The misconduct at Wells Fargo was widespread throughout the bank and at all levels of its management, which affected both the clients and the investors who were cheated," Underwood said in a statement.
"Cross-selling" refers to the process of selling new products or financial services to an existing customer and Wells Fargo, to increase revenues, applied "misconduct" driven by "strict and unrealistic sales goals."
Specifically, according to the Prosecutor's story, employees of Wells Fargo's Community Bank division engaged in fraudulent sales practices, including opening millions of false deposit and credit card accounts without the knowledge of clients.
Through a program of compensation of significant incentives, employees who met these objectives were eligible for promotions and bonuses, while employees who did not meet the sales targets faced "relentless" pressure and even dismissal.
Today's agreement states that Wells Fargo made numerous false statements to investors for many years and did not disclose its knowledge of the systemic problems that affect the bank's sales practices.
"The laws are vital to protect the hard-earned savings of working families and investors from financial fraud, and my office will continue to do what is necessary to protect the public and the integrity of our markets," said Underwood.
In early 2011, the board of directors of Wells Fargo received reports describing an increasing number of allegations of misconduct of this sales practice by its employees.
The Attorney General's Office also continues its investigation of Wells Fargo in relation to its illegal business practices of opening millions of unauthorized accounts and enrolling consumers in services without their knowledge or consent.
Today's agreement has no impact on that ongoing investigation and other pending Wells Fargo investigations.
The bad news is accumulating to one of the main US banks, since last August the Government agreed with Wells Fargo a sanction of 2.090 billion dollars for misrepresenting the quality of loans used in securities backed by residential mortgages .