Wells Fargo agrees to $3 billion settlement over fake accounts
The U.S. Department of Justice and Wells Fargo have agreed to a $3 billion settlement that includes the bank admitting to opening millions of fake accounts.
A criminal investigation into the company's actions found that from 2002 to 2016 Wells Fargo pressured employees to meet unrealistic sales goals, which led to millions of accounts being created by "thousands" of employees without consent from customers, a DOJ official told reporters on Friday.
"This settlement holds Wells Fargo accountable for tolerating fraudulent conduct that is remarkable both for its duration and scope, and for its blatant disregard of customer's private information," Michael Granston, deputy assistant attorney general for the DOJ's civil division, said in a statement.
Wells Fargo, as part of a three-year deferred prosecution agreement, will admit that, among other illegal practices, employees created false records and forged customers' signatures to open unauthorized checking and savings accounts, in some cases altering customers' personal information so they wouldn't be notified of changes to their accounts.
"The conduct at the core of today's settlements — and the past culture that gave rise to it — are reprehensible and wholly inconsistent with the values on which Wells Fargo was built," CEO Charlie Scharf said in a statement reacting to the settlement. "Our customers, shareholders and employees deserved more from the leadership of this Company. Over the past three years, we've made fundamental changes to our business model, compensation programs, leadership and governance."
This settlement only pertains to the bank -- no protections are extended to current or former employees or executives who may have been implicated in the scandal.
The $3 billion includes a $500 million civil penalty that will be distributed to investors by the Securities and Exchange Commission.
Wells Fargo in January reported a fourth-quarter net profit of $2.9 billion, down from $6.1 billion a year earlier.
For all of 2019, the bank reported a net profit of $19.5 billion.
