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March 02, 2017 at 06:26 AM
Wells Fargo & Co., seeking to resolve a bogus-account scandal that shook the company last year, warned investors it may find more victims. Separately, it said U.S. authorities are examining whether other firms abused its technology to violate international sanctions.
The bank has expanded a review into how employees pitched accounts and other products to customers, looking at a broader time frame, and is now refining its methodology to identify any improper sales, the company said in an annual regulatory filing. “This work could lead to, among other things, an increase in the identified number of potentially impacted customers,” it said.
In the other matter, Wells Fargo said it discovered overseas banks were using its software tools to help finance trade with countries and entities subject to U.S. sanctions. Wells Fargo said it alerted the Treasury Department’s Office of Foreign Assets Control and is cooperating with a Justice Department inquiry. It doesn’t appear that any of the transactions flowed through accounts at the bank, it said in the filing.
Leaders of the San Francisco-based lender have been working since September to restore its reputation and assuage public furor after authorities fined the company $185 million for possibly opening more than 2 million retail bank accounts without customers’ approval. The bank has vowed to investigate what happened and make customers whole.
Wells Fargo said it has spent $3.2 million giving refunds to customers identified in an earlier review. Any additional reimbursements probably won’t “have a significant financial impact,” the company said Wednesday.
Withholding Bonuses
The bank also announced Wednesday that it will withhold 2016 cash bonuses from eight senior executives — including Chief Executive Officer Tim Sloan and Chief Financial Officer John Shrewsberry — and claw back equity-linked compensation received earlier as the board holds management accountable for the accounts scandal. The decisions will pull about $32 million in pay and equity awards from the executives.
The pay actions — which were decided Feb. 28 — weren’t meant to signify findings of improper behavior, Chairman Stephen Sanger said in a statement. The board’s investigation is continuing.
