New York (AFP)
US authorities confirmed on Friday that they had imposed a big fine of 3 billion dollars on the Californian bank Wells Fargo for having opened, during fourteen years, millions of fictitious accounts in the name of its customers but without their knowledge.
"Wells Fargo has admitted to having collected millions of dollars in commissions, fees and interest to which it was not entitled (...) and to have illegally used personal and sensitive customer information, including their identifiers", a explained the Department of Justice (DoJ) in a press release.
Earlier, two sources familiar with the matter had told AFP that the ministry and the stock market policeman, the SEC, had reached an agreement with the firm and that an announcement was imminent.
"When companies cheat to be competitive, they harm customers and their competitors," said Michael Granston, one of the assistant justice ministers.
Of the $ 3 billion fine, $ 500 million will go directly to affected customers.
Wells Fargo, the fourth American bank by assets, could easily absorb the fine since the firm had set aside $ 3.9 billion as of June 30, 2019 to settle legal disputes.
The fictitious accounts scandal erupted in 2016 and has already resulted in the dismissal of two CEOs, the dismissal of more than 5,300 employees as well as multiple inquiries into the establishment's business practices.
The DoJ and the SEC blamed Wells Fargo employees for opening millions of accounts on behalf of clients and without their knowledge, from 2002 to 2016, to achieve sales targets.
This commercial practice was internally dubbed "deception" (gaming), according to the authorities.
"It included using the identities of existing customers - without their consent - to open current and savings accounts, to apply for bank credit and debit cards on their behalf without informing them and debiting their accounts to charge fees related to these products, "describes the Justice Department.
- "Scourge" -
Employees of the firm have even gone so far as to "falsify customer signatures to open accounts, create false PIN codes to activate unauthorized bank debit cards and transfer customer money from real accounts to fictitious accounts" . This latest sleight of hand was known internally as "funding simulated".
According to the DoJ, these "illegal" practices were known to the top of the company because two internal investigations, including one in 2004 referring to "an expanding scourge", had sounded the alarm. But nothing had been done.
"The following year, another internal investigator claimed that the problem was" out of control "," the ministry said.
John Stumpf, who was CEO from 2005 to October 2016, was banned for life from the banking sector in January by the Office of the Comptroller of the Currency (OCC), the main regulator of the banking sector in the United States. outside the Central Bank. He was also fined $ 17.5 million in the case.
The agreement with Wells Fargo is a DPA ("Deferred Prosecution Agreement"), which is a mechanism by which a company recognizes elements that are alleged against it and undertakes not to commit similar offenses for a certain period of time.
In this case, the probationary period is three years. In exchange, the authorities renounce prosecuting her in criminal proceedings.
Wells Fargo has now paid more than $ 7 billion in financial penalties related to its business practices since the break-up of the fictitious accounts case, which has plummeted its results for three years now.
Charlie Scharf, the new CEO who arrived last October, has promised to revive the bank, which was considered before this affair as the largest American bank best managed.
"The behavior at the heart of today's agreements and the culture that made it possible are reprehensible and incompatible with the values on which Wells Fargo was founded," said Mr. Scharf in a statement on Friday.
"Today's announcement is an important step to end this chapter, but there is still work to regain the trust we have lost," he added.
© 2020 AFP