A federal investigation into Wells Fargo’s sales practices has extended into the bank’s wealth management business from the retail-banking unit where the problems started, according to The Wall Street Journal.
FBI agents have interviewed wealth management employees in Phoenix,
This investigation comes a few months after the Justice Department spurred Wells Fargo to conduct its own internal investigation into its wealth management business after whistleblowers reported sales practice issues, according to another article from The Wall Street Journal earlier this month.
The whistleblowers claimed that the bank's wealth management business was pushing particular products or services "with an eye toward earning more compensation rather than finding the best fit for the customer," the journal reported.
The bank's wealth and investment management division has more than 14,500 financial advisors overseeing approximately $1.7 trillion in client assets,
Wells Fargo declined to comment specifically on the report of a new investigation by the Justice Department and the SEC. But the bank said in an email that its “top priority is to rebuild trust with all of our stakeholders.” It also pointed to a statement in its latest 10-K filing that reflects its “continued commitment to transparency, even when all of the information or the final outcome of a matter may not be known just yet. We are making significant progress in our work to identify and fix any issues, make things right, and build a better, stronger company.”
The Justice Department declined to comment, saying that as a matter of policy, “it does not confirm, deny, or otherwise comment, on the existence or nonexistence of investigations.”
The SEC did not respond to a request for more information.
Ever since
Most recently, the Federal Reserve took the unprecedented step of restricting Wells Fargo's growth until it improves its governance and controls. The Fed also ordered the bank to replace four board members by the end of the year.
Separately, Wells disclosed this week that it gave CEO Tim Sloan a 36% pay raise to $17.4 million for 2017,
Sen. Elizabeth Warren (D-Mass.) criticized the news, citing an alleged auto-insurance scam that the bank was embroiled in, among other scandals. “I don’t think that sort of corporate management merits a raise for CEO Tim Sloan,” Warren