Attestation Update – A&A for CPAs

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Posts Tagged ‘bank fiascos

Ongoing internal investigation and disciplinary actions at Wells Fargo

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October 2016 photo at Wells Fargo’s museum in San Diego by James Ulvog.

The Wells Fargo fake account fiasco doesn’t seem to be generating any more major headlines. Still some notable news if you go several pages into the second section of the WSJ. Also, the WF living trust plan got a failing grade.

2/21/17 – MarketWatch – Wells Fargo fires 4 managers as part of investigation into sales scandal – Titles of fired senior managers shows decent level of seriousness in accountability:

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Written by Jim Ulvog

March 15, 2017, 8:13 am at 8:13 am

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Credit Suisse under investigation. Again. For money laundering. Again.

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A different type of money laundering. Image courtesy of Adobe Stock.

A different type of money laundering. Image courtesy of Adobe Stock.

Looks like Credit Suisse is in trouble again. The feds and NYDFS have opened another money laundering investigation.

Check out the report on 2/23 at Wall Street Journal – Credit Suisse Probe Opens Old Wounds for the following info.

A retired professor invested $500K in a startup back in 2000. When the company went public in 2008, his shares were worth $80M.

Cool!  Good for him!

He didn’t want to share a lot of that with Uncle Sam, so he got some help from the Israel branch of Credit Suisse to cut his tax bill.

By 2013 he had $200M parked in his accounts in Switzerland.

Well, somehow the revenuers caught up with him.

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Written by Jim Ulvog

February 24, 2017, 6:00 am at 6:00 am

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Efforts continuing to clean up fake account fiasco at Wells Fargo

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October 2016 photo at Wells Fargo's museum in San Diego by James Ulvog.

October 2016 photo at Wells Fargo’s museum in San Diego by James Ulvog.

There haven’t been a lot of high-profile articles about the Wells Fargo fake account fiasco recently. I’ve noticed a number of articles though, which suggest there is ongoing activity addressing the intentional, systemic failure. This disaster will not be cleared up soon.

  • How does Wells fix the indirect harm it caused?
  • New compensation plan removes cross-selling as a benchmark
  • Possible MD&A enforcement action?
  • Branches received 24 hour notice of internal inspections
  • Bank may eliminate 2016 bonuses for senior staff

12/27/16 – Wall Street Journal – Wells Fargo Is Trying to Fix Its Rogue Account Scandal, One Grueling Case at a Time – Making customers whole will be easy if the customer was only charged a few dollars a month for a while. Still simple to resolve if there were monthly charges and a bunch of overdraft fees because money was taken out of an account unknowingly which resulted in some bounced checks.

What do you do when the unpaid fees on a credit card flowed into negative information on a credit report which resulted in a customer being denied funding for a home loan somewhere else? That’s what happened to one interviewed customer.

Destroying someone’s credit is a tough thing to make right.

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Written by Jim Ulvog

February 13, 2017, 9:14 am at 9:14 am

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Minor updates on Wells Fargo fiasco

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Concord stage coach at Wells Fargo museum in San Diego. Photo by James Ulvog.

Concord stage coach at Wells Fargo museum in San Diego. Photo by James Ulvog.

Not a lot of news in the last few days about the Wells Fargo new account fiasco, but there are a few pieces of information.

12/12 – Reuters – Prudential stops distribution of policies sold through Wells Fargo – With the increased attention on the low-cost life insurance product from Prudential, called MyTerm, which was sold by Wells Fargo, the insurance company suspended sales of the product through the bank.

Article says that separately Wells Fargo suspended sales of renters insurance that goes through a different insurance company.

The California Insurance Commission has opened an investigation of the product sales.

Article says the California regulators says the New Jersey insurance regulator has also opened an investigation. Reporter cannot get confirmation from the New Jersey regulator.

12/16 – Francine McKenna at MarketWatch – Prudential allegations complicate Wells Fargo’s work with new partnersRead the rest of this entry »

Written by Jim Ulvog

December 16, 2016, 9:37 am at 9:37 am

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More regulatory punishment for Wells Fargo. Another possible dimension of the fake account fiasco.

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Wells Fargo 'mud wagon' at Seely Stable museum in San Diego' Old Town state park. Photo by James Ulvog.

Wells Fargo ‘mud wagon’ at Seely Stable museum in San Diego’s Old Town state park. Photo by James Ulvog.

More punishment on the way from the OCC.

Also, accusations emerged over the weekend that staff of Wells Fargo may have been opening insurance products from Prudential without customer permission. Keep in mind those are only accusations by terminated staff. If substantiated, this could be a new layer of the fake account scandal.

I previously mentioned OCC imposing additional consequences from the fake account scandal. Background for the next article:

  • 11/18 – Wall Street Journal – Banking Regulator Imposes New Restrictions on Wells Fargo – Apparently the consent degree signed by Wells had some harsh language in it which was immediately waived by the OCC. On Friday the OCC unilateally revoked their waiver. As of now, Wells Fargo must get OCC permission before it hires or fires senior executives, before it make changes to the board of directors, and before making any “golden parachute” severance payments to executives. Approval will be required to changes in the bank’s business plans.

Update on that action:  11/20 – Wall Street Journal – Wells Fargo Grapples With OCC Move Internal communication from the new CEO indicates the restrictions from OCC are not due to new developments. Sources for the article indicate uncertainty for the reason. Could be a bureaucratic reaction to criticism the OCC was slow to catch on to the issue or that the agency went too lightly on the bank.

Additional punishment…

12/9 – Wall Street Journal – Wells Fargo Likely Face Regulator Downgrade, harming Its Prospects – OCC may be downgrading Wells’ rating under the Community Reinvestment Act. This would be another round of extra-judicial punishment for the fake account fiasco.

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Written by Jim Ulvog

December 11, 2016, 7:33 am at 7:33 am

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Update on Panama Papers – 11/22

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Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Either there hasn’t been much going in the money laundering news or I’ve not paid enough attention. On the other hand, governmental investigations are run behind the scenes. Perhaps the regulators are working out of sight.

Here are a few articles I’ve noticed in the last few months.

7/28 – U.S. Prosecutors Probe ‘Panama Papers’ Law Firm’s Employees – Leaks say Department of Justice has opened an investigation of various staff in the D.C. office of Mossack Fonseca.

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Written by Jim Ulvog

November 22, 2016, 7:00 am at 7:00 am

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A few more updates on the ongoing banking fiascos: Wells Fargo and J.P. Morgan

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October 2016 photo at Wells Fargo's museum in San Diego by James Ulvog.

October 2016 photo at Wells Fargo’s museum in San Diego by James Ulvog.

Odd development yesterday in the fake account fiasco at Wells Fargo. The OCC decided to get involved in lots of internal decisions at the bank.

The side fiasco of banks hiring relatives of clients in order to gain future business is off point from the banking fiascos I’ve been focused on. However, one settlement has caught my eye. Two articles describe the mess at J.P. Morgan.

11/18 – Wall Street Journal – Banking Regulator Imposes New Restrictions on Wells Fargo – Apparently the consent degree signed by Wells had some harsh language in it which was immediately waived by the OCC. On Friday the OCC unilaterally revoked their waiver.

As of now, Wells Fargo must get OCC permission before it hires or fires senior executives, before it make changes to the board of directors, and before making any “golden parachute” severance payments to executives. Advanced approval will be required to any changes in the bank’s business plans.

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Written by Jim Ulvog

November 19, 2016, 9:57 am at 9:57 am

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