Wells Fargo may believe that its recently announced $110 million settlement will put an end to the many federal lawsuits over the bank’s fake account fiasco, but that may be wishful thinking. In fact, the financial institution is still party to nearly a dozen investigations and lawsuits.
CNN reports that despite taking steps to put the ordeal behind it — ditching high-pressure sales goals, former CEO John Stumpf’s “retirement,” the forfeiture of executive bonuses, and other measures — the company still faces outside probes from federal and state regulators, as well as internal investigations.
CNN provides a full list of the investigation currently facing Wells Fargo, but here are three of the larger ones:
• Department of Justice Criminal Investigation – Back in September, federal prosecutors in U.S. attorney’s offices announced they were in the early stages of an investigation related to the bank’s alleged improper sales tactics that started in 2013
Sources said at the time that the probe could eventually lead to criminal or civil charges. So far, prosecutors have issued a subpoena for documents and materials related to the sales practices.
• Whistleblowers — Wells Fargo also faces separate investigations and lawsuits related to whistleblowers.
The bank confirmed in a Securities and Exchange Commission filing in November that the agency has been looking into the fake account fiasco.
While the SEC didn’t provide details on the probe, it was thought to be related to whether or not Wells misled investors by promoting the financial benefits of its cross-selling policies (i.e., getting employees to sell lines of credit to checking account customers, mortgages to credit card customers, etc.) while failing to properly disclose that it was aware of employees who had gamed this system by opening fraudulent, unauthorized accounts in customers’ names.
The investigation could also be tied to Massachusetts Senator Elizabeth Warren’s call for the SEC to look into whether Wells’ violated federal whistleblower protection laws after employee claim they were fired for reporting the bank’s bad deeds, CNN reports.
Speaking of whistleblowers, several former employees have filed lawsuits against the bank claiming wrongful termination after calling the bank’s ethics hotline, leading lawmakers to urge the Department of Labor to inquire about the company’s actions.
These allegations also prompted the DOL to review allegations that the bank violated federal laws by not paying overtime to employees, CNN notes.
• Internal Reviews — Wells Fargo isn’t just being probed from the outside. as investigations continue internally related to the scope of the fake account fiasco.
CNN points out that Wells Fargo agreed to review accounts opened between 2009 to 2010 to see if they are legitimate or a product of high-pressure sales tactic.
In addition to these lawsuits and investigation, CNN reports that Wells also faces inquiries from several states, shareholders, and Congress.
Not Quite Settled
When Wells Fargo announced the $110 million settlement in a California class-action lawsuit over these fake accounts, the bank said it expected the deal would cover all affected customers, putting an end to the dozen or so other federal consumer lawsuits.
However, lawyers representing plaintiffs in some of those cases are skeptical.
Zane Christensen, an attorney representing plaintiffs in one lawsuit currently pending in a Utah federal court, recently told Consumerist that he does not believe the proposed settlement serves the purpose of satisfying all injured parties.
“The parties have not conducted any discovery to determine the full nature or extent of the damages caused from the fraudulent acts of Wells Fargo,” explained Christensen. “Therefore, without this information, we do not believe this settlement will make all injured parties whole.”