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Wells Fargo Sacks 36 District Managers in Fake Account Case


Continuing its steps to rectify the mistakes committed almost two years back, Wells Fargo & Company WFC has dismissed about 36 district managers, on charges of failing to conduct proper oversight, which contributed to the major sales scandal. The news was reported by The Wall Street Journal.

The Office of the Comptroller of the Currency has been informed about the move by the bank's consumer banking head, Mary Mack.

Per the Journal, these moves mark Wells Fargo’s efforts to convince regulators of the progress made in bolstering the internal control systems, shortcoming in which led to the series of scandals that came into light after September 2016.

In its latest quarterly filing, Wells Fargo revealed that it has wrongly foreclosed homes of more people than was previously disclosed. Having conducted a review for longer period (Mar 15, 2010 – Apr 30, 2018), the company found that in about 545 cases loan modification was denied to eligible customers due to technical error, following which, foreclosure was completed.

Wells Fargo has a long list of ongoing probes that continue to impact its reputation. One of the enquiries being conducted on the bank’s several operations is related to consumer deposit accounts. The consumer financial protection bureau is investigating whether customers were wronged by Wells Fargo’s procedures related to freezing of consumer deposit accounts after it detected suspected fraudulent activity that affected those accounts.

One of the goals in the company’s 2019 priority list is to enhance compliance and operational risk management systems along with timely remediation practices. Also, Wells Fargo is spending more on technology so as to ensure better data management and cybersecurity. These activities, along with close supervision of regulatory authorities, might help Wells Fargo move past the scandals and make way for growth.

Shares of Wells Fargo have lost 7% over the past six months compared with 8.6% decline recorded by the industry it belongs to.

Wells Fargo currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

E*TRADE Financial Corporation ETFC has witnessed 6% upward estimate revision over the past 60 days. Also, the company’s shares have risen nearly 37% in the past two years. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Citigroup C has witnessed 1.5% upward estimate revision for current-year earnings over the past 60 days. Also, the company’s shares have risen nearly 5% in the past two years. It carries a Zacks Rank #2 (Buy) at present.

TD Ameritrade Holding Corporation’s AMTD Zacks Consensus Estimate for current-year earnings has been revised 2.1% upward over the past 60 days. Also, the company’s shares have risen nearly 21.2% in the past year. It carries a Zacks Rank of 2, at present.

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