Wells Fargo to pay $37.3 mln to settle U.S. claims it fraudulently overcharged customers - Reuters

sinayamars.blogspot.com

The company and law firm names shown above are generated automatically based on the text of the article. We are improving this feature as we continue to test and develop in beta. We welcome feedback, which you can provide using the feedback tab on the right of the page.

NEW YORK, Sept 27 (Reuters) - Wells Fargo & Co (WFC.N) will pay $37.3 million to settle U.S. government claims it fraudulently overcharged commercial clients on foreign exchange services, the latest in a string of scandals over the bank's treatment of customers.

Monday's settlement resolves U.S. Department of Justice civil fraud charges against the fourth-largest U.S. bank, and includes a $35.3 million fine plus a $2 million forfeiture.

Wells Fargo previously returned $35.3 million to customers as restitution, making its total payout about $72.7 million.

The Justice Department said sales specialists jokingly used expressions such as "back the truck up" and "when in doubt, spread them out" when they were overcharging customers, with one referring to the sales group as a "bucket shop."

Wells Fargo declined to comment, pending required approval of the settlement by U.S. District Judge John Koeltl in Manhattan federal court.

The San Francisco-based bank has been subject since 2018 to a Federal Reserve cap on assets, which must remain below $1.95 trillion until it improves its governance and risk controls.

Wells Fargo has already paid more than $5 billion in fines since the scandals began in 2016.

On Sept. 22, Fed Chair Jerome Powell said the central bank was closely monitoring the bank's efforts to address "widespread and pervasive" problems. read more

Powell spoke eight days after Massachusetts U.S. Senator Elizabeth Warren called for Wells Fargo to be broken up. read more

Shares of Wells Fargo closed down 36 cents, or 0.8%, at $47.56.

Monday's settlement resolves claims that Wells Fargo defrauded 771 commercial customers, including many small- and mid-sized businesses, on foreign exchange services between 2010 and 2017.

The government said Wells Fargo systematically charged higher spreads and sales margins than it promised, and encouraged the overcharges by linking specialists' bonuses to how much revenue they generated.

According to court papers, specialists also used what they called the "big figure trick" or "transposition error game" to cheat customers, such as by charging $1.0213 to buy euros instead of $1.0123, picking up an extra 89 basis points.

A whistleblower, former Wells Fargo foreign exchange trader Paul Kohn, will receive $1.6 million from the bank's payout, the maximum available.

His lawyer, Jonathan Willens, said Kohn had worked on a different desk from where the alleged fraud occurred, but was in the same room and could hear what transpired.

Reporting by Jonathan Stempel in New York; Editing by Mark Porter and Dan Grebler

Adblock test (Why?)

"pay" - Google News
September 28, 2021 at 04:16AM
https://ift.tt/3CNBfhp

Wells Fargo to pay $37.3 mln to settle U.S. claims it fraudulently overcharged customers - Reuters
"pay" - Google News
https://ift.tt/301s6zB


Bagikan Berita Ini