Between 2002 and 2016, one major U.S. bank had been engaging in an egregious practice about which it would later be forced to admit.
In 2022, Wells Fargo WFC settled with the Consumer Financial Protecton Bureau (CFPB) for more than $3 billion.
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Employees of the bank had been creating fake accounts for its customers that they did not need and without their knowledge.
The reason they had been involved in this conduct, it was found, was that the company had created unrealistic sales goals for the employees, forcing them to fudge perception of their job performance by secretly establishing the fabricated accounts.
It was an astonishing scandal, but Wells Fargo's troubles did not end there.
The bank also settled a lawsuit for $1 billion in May 2023 after being accused of defrauding its shareholders about its progress recovering from the scandal.
The shareholders contended that Wells Fargo was sugarcoating the degree to which it was complying with federal orders resulting from its nefarious activities.
As that reality became widely reported, the bank's market value plummeted by more than $54 billion over two years concluding in March 2020.
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Wells Fargo discloses a new investigation
In a regulatory filing Oct. 31, Wells Fargo revealed that it was once again under investigation, this time by the Securities and Exchange Commission (SEC).
The investigation relates to advisory account cash sweep options, according to the filing.
"The United States Securities and Exchange Commission (SEC) has undertaken an investigation regarding the cash sweep options that the Company provides to investment advisory clients at account opening," Wells Fargo disclosed.
Sweep accounts are set up to automatically transfer funds above a specified amount to a higher interest earning option at the end of each day.
"Wells Fargo Advisors offers a sweep feature with three options for clients to earn a return on uninvested cash balances in their accounts, according to information listed on the bank's website," reported BankingDive.
"The cash sweep options include a standard bank deposit sweep, expanded bank deposit sweep and a money market fund sweep," BankingDive continued. "Eligibility is based on the type of investment account and nature of account ownership, according to the bank."
Wells Fargo did not disclose any further information about the specifics of the investigation.
The bank's reputation had also been previously hurt in 2022 over criticism about its diverse hiring practices.
BankingDive reported the following on that matter:
About a dozen current and former employees of the bank told The New York Times in May 2022 that Wells Fargo held phony job interviews for nonwhite and female job-seekers for positions that had already been offered to other candidates.
The Department of Justice closed its investigation into Wells Fargo’s hiring practices without taking action, while the SEC is still investigating the matter, the bank also disclosed in its filing on Tuesday.
Meanwhile, Wells Fargo is still operating under a $1.95 trillion asset cap the Federal Reserve placed on the bank in 2018.
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