Justice Department Investigating Wealth Management Unit at Wells Fargo
The Justice Department instructed Wells Fargo to conduct an independent investigation into its wealth-management business in late 2017 after whistleblowers raised concerns to the agency.
According to the bank, the review will assess,
“whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the company’s investment and fiduciary services business.”
The investigation is currently in its preliminary stages according to Wells Fargo, and it’s not clear what has been uncovered at this point.
This is not the first time that the bank has been in legal trouble in recent years. It was hit with a $185 million fine in September of 2016 after opening approximately two million customer credit card and debit accounts without their customers’ knowledge. In 2017, Wells Fargo also admitted to improperly charging about 110,000 mortgage and 800,000 auto-loan customers, and is reportedly in the process of refunding those people over $100 million.
In an appearance before the Senate Banking Committee on Thursday, March 1, the bank disclosed that it is also reviewing fee calculations for some custody and fiduciary accounts. Wells Fargo stated that it found some customers’ accounts were overcharged due to the application of incorrect fees.
“Systems, operations and account-level reviews are under way to determine the extent of any assets and accounts affected, and root cause analyses are being performed with the assistance of third parties,” the bank said in its filing. <
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