Wells Fargo agrees to pay US government $3 billion after fake account scandal News
Wells Fargo agrees to pay US government $3 billion after fake account scandal

Wells Fargo has entered into a $3 billion agreement with the United States Department of Justice (DOJ) and the United States Securities and Exchange Comission (SEC) in an investigation over fraudulent sales practices. In return, the DOJ and SEC have agreed to drop criminal charges and resolve a pending civil investigation.

The investigations uncovered millions of fraudulent accounts opened by Community Bank, a Wells Fargo business unit, from 2002 to 2016. Additionally, Community Bank allegedly practiced unethical and unlawful sales practices to sell accounts to its customers without regarding customer needs.

Charlie Scharf, the Wells Fargo CEO, criticized the company’s practices and admitted the company’s culpability in the scandal:

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. 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. While today’s announcement is a significant step in bringing this chapter to a close, there’s still more work we must do to rebuild the trust we lost. We are committing all necessary resources to ensure that nothing like this happens again, while also driving Wells Fargo forward.

This scandal is not the only financial crimes investigation involving Wells Fargo in the past few years. Federal regulators fined Wells Fargo $1 billion in April of 2018 for unfair lending practices that violated the Consumer Financial Protection Act. Similarly, in August of 2018, the DOJ penalized Wells Fargo for misrepresenting the quality of loans used in residential mortgage-backed securities.

The DOJ and SEC settlement does not mark the end of this scandal. The House Financial Service Committee plans to hold hearings over Wells Fargo in March.

 

 

 

THIS DAY @ LAW

Thomas Becket, former Chancellor of England, murdered by Henry II's knights

On December 29, 1170, Archbishop Thomas Becket, former Chancellor of England, was murdered in Canterbury Cathedral by knights acting in the name of Henry II.

Becket and Henry had been entangled in a power struggle over, among other things, criminal jurisdiction over clergy. Read a contemporary account of the murder of Thomas Becket.

Texas attains US statehood

On December 29, 1845, Texas became the twenty-eighth state to join the United States of America when US President James K. Polk signed the Ordinance of Annexation. Texas had a complicated path to statehood because it had formerly been part of Mexico and then an independent republic. The US Congress passed the Annexation of the Republic of Texas Joint Resolution on March 1, 1845. Voters in Texas then approved the Ordinance of Annexation in October, before it was approved by the US Congress and signed into law by President Polk on this day in 1845. The US Supreme Court later ruled in Texas v. White that, despite its unique path to statehood, Texas did not have the right to secede from the union.