Two persons familiar with the matter told The Wall Street Journal that Wells Fargo overcharged hundreds of business clients in foreign currency trades. Of 300 clients, only 35 paid the actual price for the trades while doing business via Wells Fargo.
The news comes after a year since a scandal about the banking giant’s business practices which involved forcing clients to pay for unsolicited accounts broke out. The bank paid a $185 million fine and lost its CEO in the aftermath of the scandal.
The Journal’s sources said they overheard the report during a conference call this summer. That scandal prompted the bank to fire at least four bankers. Federal investigators have also launched an investigation.
The bankers overcharged the clients because Wells Fargo promised to give them bonuses based on their sales targets. Wells Fargo’s practice of giving employees bonuses based on performance is so ill-conceived that it led to the first scandal. The group promised to change the practice earlier this year.
Wells Fargo’s Fate Lies with CFPB’s New Management
Wells Fargo’s investigation into the phony accounts was part of a plan to revamp the company’s policies. That scandal led to a congressional hearing and CEO John Stumpf’s ouster, but he left with $133 million in his pocket.
The federal agency that is in charge of such investigations, the Consumer Financial Protection Bureau, is now looking for a director. Democrats are concerned that Trump’s pick may be too lenient towards Wall Street.
Under the Obama administration, the CFPB slapped Wells Fargo with a $100 million fine in response the phony account scandal. The bureau will now be temporarily led by President Trump’s budget director Mick Mulvaney instead of Leandra English, who is former CFPB’s head Director Richard Cordray’s pick. English filed a lawsuit to prevent Trump’s pick from taking the position.
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