Permalink to Wells Fargo Settlement of $575 Million Highlights Massive Failures of Centralized Financial Institutions

Wells Fargo agreed on Friday to pay a $575 million settlement. The resolution is expected to end another chapter of legal battles stemming from investigations led by regulators in every US state and Washington, D.C. that has looked into allegations of systemic wrongdoing by the bank.

Employees at Wells Fargo claim that if they had not opened up millions of bogus customer bank accounts as instructed, they would have lost their jobs for failing to meet sales quotas.

Today’s settlement is not the first for Wells Fargo. It paid $185 million in fines when it copped to opening approximately 1.5 million unauthorized, fee-bearing bank accounts that extracted money from their customers. Among other complaints about the bank, the “fake account” scheme, which surfaced in 2016 after many years of operation, did not stop accusers from calling out more bad behavior.

“Wells Fargo customers entrusted their bank with their livelihood, their dreams, and their savings for the future. Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products – from bank accounts to insurance – that they never wanted. This is an incredible breach of trust that threatens not only the customers who depended on Wells Fargo, but confidence in our banking system. As our investigation found, Wells Fargo’s conduct was unlawful and disgraceful.”

Wells Fargo reported net income of $22.2 billion in 2017. Its top five institutional holders are led by Warren Buffett, chairman and CEO of Berkshire Hathaway; Tim Buckley, president and CEO of Vanguard Group; Larry Fink, chairman and CEO of Blackrock; Abigail Johnson, president and CEO of FMR LLC; and Joseph Hooley, chairman and CEO of State Street.