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  • Wells Fargo scandal may force New York City to find new bank ------------- New York Daily News ------------ May 23, 2017
    ------------------------------ The city has hundreds of millions of dollars deposited with Wells Fargo -----------------------------

    City rules may require New York to yank its deposits from Wells Fargo, one of 20 banks approved to hold the city’s cash.

    A commission is set to meet next week to decide which banks are approved for city deposits for the next year — and advocates point to the city’s own rules to argue officials are legally required to bump the embattled bank from the list.

    Wells Fargo — embroiled in a scandal over the creation of up to 2 million fake accounts — was knocked down to a “needs improvement” rating by federal regulators in March under the Community Reinvestment Act, citing an extensive pattern of discriminatory and illegal lending practices.

    New York City rules say that in order to be designated to get government deposits, a bank must have at least a “satisfactory” rating.

    “The city’s own rules require that they sever ties,” said Andy Morrison, campaigns director for the New Economy Project.

    “The rule exists for a reason,” he said. “It’s the city’s money and shouldn’t be in banks that are failing to service communities.”

    The city has hundreds of millions of dollars deposited with Wells Fargo, sources said. An exact figure was not available.

    The Banking Commission is set to meet May 31 to approve a new list of banks, a session that was originally scheduled for Tuesday and then postponed.

    Mayor de Blasio and City Controller Scott Stringer sit on the commission, along with Finance Commissioner Jacques Jiha.

    “What happened at Wells Fargo is unacceptable — and there needs to be real accountability,” said Stringer spokesman Tyrone Stevens.

    “Our office has demanded the bank take a series of steps to begin restoring investor, customer, and public confidence. We are currently reviewing the city’s business relationship with Wells Fargo and working with the de Blasio administration to determine the best course of action going forward.”

    A de Blasio spokeswoman did not answer questions about Wells Fargo other than to say the issue would be discussed at the time of the meeting next week.
    Imageniccsfrom
  • The Federal Government should be required to post a warning on the outside of all of Wells Fargo's branches and its corporate headquarters reading in BOLD FACE letters ---- " The Surgeon General and Comptroller of the Currency have determined that doing business with Wells Fargo can be HAZARDOUS to your HEALTH and FINANCIAL WELL BEING!"
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  • Here's Why Wells Fargo's Earnings Have Dropped Two Years in a Row ________ Motley Fool ________ May 24, 2017
    _____ Even BEFORE the FAKE ACCOUNTS scandal _____ Wells Fargo's earnings had already started to decline.

    https://www.fool.com/investing/2017/05/24/heres-why-wells-fargos-earnings-have-dropped-two-y.aspx

    Here's Why Wells Fargo's Earnings Have Dropped Two Years in a Row -- The Motley Fool
    It’s not as simple as you might think.
    www.fool.com
  • ~~~~~~~~~~~ Could Wells Fargo's scandal boost mortgage discrimination lawsuits? L.A., other cities hope so ~~~~~~~~~~
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Los Angeles Times ~~~~~~~~~~~~~ May 25, 2017 ~~~~~~~~~~~~~~~~~~~~~~~~~~~

    A recent Supreme Court decision that will allow mortgage discrimination cases against Wells Fargo and other banks to proceed is more than just another bad headline for the San Francisco financial giant.

    As those cases progress, they represent yet another way that the bank’s practice of opening unauthorized accounts for customers could come back to haunt it.

    Attorneys for the cities of Philadelphia and Oakland are arguing that the unauthorized accounts scandal — and the bank’s own admissions as to what caused it — bolsters their claims that Wells Fargo improperly steered black and Latino home buyers into pricier mortgages than white buyers.

    Cities have argued that those practices in the years leading up to last decade’s housing crash contributed to thousands of foreclosures and blight, which in turn hurt cities’ property tax income and strained public resources.

    Other cities suing the bank over those claims, including Los Angeles and Miami, may seek to raise the unauthorized accounts issue, too.

    Those lawsuits are in various stages but all scored a critical procedural victory this month when the U.S. Supreme Court ruled in the Miami case that cities alleging financial harm due to mortgage discrimination can sue banks under the federal Fair Housing Act.

    Banks had argued, and a lower court had earlier ruled, that cities could not do so. But the high court said that cities must do more than simply show banks’ practices could “foreseeably” lead to harm. They must show a “direct relation” between allleged predatory lending and its effects on city coffers, it said.

    Wells Fargo spokesman Tom Goyda said the accounts scandal and the mortgage discrimination cases have nothing to do with each other and that cities are grasping at straws.

    “They’re really just trying to leverage a hot issue in their favor,” Goyda said. “We don’t think the sales practices argument they want to introduce in the Oakland case and Philadelphia and, I assume, to others, is relevant.”

    In the Philadelphia and Oakland cases, attorneys point to a report, commissioned by Wells Fargo’s board of directors, that found the practice of opening unauthorized accounts was able to persist for years because of a lack of proper oversight by executives and internal compliance officers.

    That same lack of oversight, attorneys argue, may have contributed to mortgage discrimination, in which Wells Fargo pushed minority customers into mortgages that were more expensive — carrying higher interest rates and fees — than the loans that were offered to similarly credit-worthy white borrowers.

    The cities' cases against Wells Fargo and other large banks, including Bank of America, rely in large part on statistical analyses of loans, looking at how borrowers of different races were treated differently.

    In its case against Wells Fargo, which was dismissed by a lower court but is on appeal, Los Angeles alleged that black mortgage borrowers were more than twice as likely as white borrowers with similar credit scores to receive loans the city deemed predatory. Latino borrowers were 1.5 times as likely. Other cities alleged similar levels of discrepancies between white and minority borrowers.

    When borrowers started defaulting on their loans and banks foreclosed, property values fell, cutting into city tax revenue. Los Angeles’ lawsuit against Wells Fargo cited a report from the advocacy group Alliance of Californians for Community Empowerment and the California Reinvestment Coalition that estimated the city lost at least $481 million in property tax revenue.

    That report also estimated that the city spent $1.2 billion on costs related to foreclosures, including increased police and emergency calls, property maintenance and safety inspections.

    Kevin Stein, deputy director with the California Reinvestment Coalition, said minority neighborhoods were disproportionately harmed by the banks’ alleged practices and thus were hit harder by a wave of foreclosures.

    He said neglected foreclosed homes often became dens for squatters and criminal activity, while pools posed health problems as they became breeding grounds for disease-carrying mosquitoes.

    “Some of these neighborhoods were devastated and you had people living next to homes that were dilapidated -- stripped inside and out,” he said.

    Though foreclosures are way down from the height of the crisis, Stein said the neighborhoods have yet to fully recover. Just the other day, he said, he spoke with a housing counselor from Los Angeles who is still handling related foreclosures.

    Joel Liberson, one of a team of attorneys representing Los Angeles, Oakland, Philadelphia and Miami in their mortgage discrimination cases, said better internal controls at Wells Fargo could have prevented some of these problems.

    “The practices and policies that led to looking the other way when it came to opening bank accounts and credit cards are the same practices and policies that may very well have given rise to discriminatory mortgage practices,” said

    A key element of the cities’ argument, Liberson said, is that both the accounts scandal and the allegations of mortgage discrimination stem from a poorly supervised system of incentives that promoted unethical behavior.

    Employee incentives are at the root of Wells Fargo’s unauthorized accounts scandal. To meet ever-growing sales goals, earn bonuses and keep their jobs, thousands of Wells Fargo workers took to opening accounts that customers did not authorize. That practice, first uncovered by a 2013 Los Angeles Times investigation, led to a settlement last year with the bank, which agreed to pay $185 million in fines to regulators.

    Liberson said linking the bank’s incentive system and its lack of appropriate corporate oversight strengthens the cities’ cases against Wells Fargo by explaining how unethical practices might have gone unchecked.

    “It’s one thing to say you had a business that was issuing unlawful products,” Liberson said. “But one of the important questions a judge or jury is going to want to know is, why did that happen? How did that happen? What allowed it to happen? Those are important questions to answer.”

    Philadelphia, which filed its lawsuit against the bank last week, has included findings from the Wells Fargo board report in its complaint.

    Liberson and other attorneys representing Oakland asked a U.S. district judge in San Francisco for permission to add similar elements to their case, arguing that the bank’s unethical sales practices “appeared to have been common among all lines of business at Well Fargo, including home mortgages.”

    Attorneys in the Oakland case also want the bank to turn over two internal reports related to sales practices and the creation of unauthorized accounts.

    The bank’s attorneys, though, say that Oakland is simply trying to “cast Wells Fargo in a negative light.”

    “Contrary to the city’s innuendos, those materials have nothing to do with the alleged misconduct in this case,” the bank’s attorneys wrote.

    http://www.latimes.com/business/la-fi-wells-fargo-mortgage-cases-20170525-story.html

    Could Wells Fargo's scandal boost mortgage discrimination lawsuits? L.A., other cities hope so
    Cities suing Wells Fargo over alleged mortgage discrimination think the bank's accounts scandal could help their cases, saying the bank's practices show a general lack of internal oversight.
    www.latimes.com
  • Wells Fargo now offering brokers big bonuses to join them. I hope the brokers see thru this shameless scam and don't join them. If my broker switched to Wells Fargo, I would not give him my business
  • It's now clear that the former chairman and CEO of Wells Fargo, John Stumpf, was WRONG when HE SAID last year that the bank's fake-account scandal WOULDN'T HAVE a MATERIAL IMPACT on the bank's financial performance.
    ------ Wells Fargo's latest quarterly regulatory filing proves that the scandal IS, in fact, having a MATERIAL IMPACT -----

    The Motley Fool -------------- May 16, 2017

    Wells Fargo Is Fighting Legal Battles on Two Fronts
    Here are the legal problems Wells Fargo faces right now.

    It's now clear that the former chairman and CEO of Wells Fargo (NYSE:WFC), John Stumpf, was wrong when he said last year that the bank's fake-account scandal wouldn't have a material impact on the bank's financial performance.

    Whether he believed this at the time or not, it's hard to say. But by claiming it wasn't material, Stumpf was able to keep the issue a secret from shareholders even though the bank had fired the equivalent of 5% of its branch-based employees from 2011 to 2015.

    Either way, Wells Fargo's latest quarterly regulatory filing proves that the scandal is, in fact, having a material impact on the nation's third-biggest bank by assets.

    There's the $327 million that it's already agreed to pay in legal fines and settlements. Then there's the fact that Wells Fargo eliminated product sales goals in its branches, which has caused new checking account openings and credit card applications to fall by between a third and a half compared to the prior-year period. The scandal has also sullied the bank's once-sterling reputation.

    But it wasn't until Wells Fargo filed its first-quarter 10-Q with the Securities and Exchange Commission that investors got a sense of the extent of the California-based bank's ongoing legal travails.

    In the three months ended March 31, Wells Fargo spent $264 million more on outside professional services than it did in the same quarter last year. Some of that was for project and technology spending, but higher legal expenses related to its sales scandal was also a cause. All told, the bank now predicts that "reasonably possible" losses from legal actions could exceed its current litigation provisions by $2 billion.

    The higher expenses are coming from Wells Fargo's two-front legal war. On one front, it's dealing with a variety of governmental investigations. As the bank explained in its 10-Q:

    Federal, state and local government agencies, including the United States Department of Justice, the United States Securities and Exchange Commission and the United States Department of Labor, and state attorneys general and prosecutors' offices, as well as Congressional committees, have undertaken formal or informal inquiries, investigations or examinations arising out of certain sales practices of the Company that were the subject of settlements with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Office of the Los Angeles City Attorney announced by the Company on September 8, 2016.

    On the second front, it's dealing with lawsuits filed by consumers, shareholders, and employees.

    Consumers are suing Wells Fargo after allegedly receiving products or services without their authorization or consent;
    Shareholders are suing the bank for securities fraud and breach of fiduciary duty; and
    Employees are suing the bank for retaliating against whistleblowers who tried to bring the scandal to light.

    The net result is that Wells Fargo is likely to be tied up in the courts for years before its fake-account scandal is fully resolved. That doesn't mean investors should necessarily avoid the bank's stock, but it does imply that Wells Fargo's performance will, at least for the time being, continue to be materially impacted by cleanup costs.

    https://www.fool.com/investing/2017/05/16/wells-fargo-is-fighting-legal-battles-on-these-two.aspx

    Wells Fargo Is Fighting Legal Battles on Two Fronts -- The Motley Fool
    Here are the legal problems Wells Fargo faces right now.
    www.fool.com
  • Sloan just said great progress has been made; He just got caught with more dirt behind the ears and he calls lack of clarity/truth progress?

    Do these people really believe denying guilt for 10,000 years brings innocence?

    Beam me up Scotty
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  • Philadelphia Sues Wells Fargo Over Race-Based Discrimination ------------ The Daily Caller ---------- May 15, 2017

    Monday’s lawsuit is the latest in a troubled saga for Wells Fargo.

    Philadelphia sued Wells Fargo Monday, claiming the American banking icon engaged in predatory lending practices in violation of the federal Fair Housing Act (FHA).

    The lawsuit comes on the heels of a Supreme Court ruling in early May that said municipal governments have legal standing to sue banks over discriminatory lending practices under the FHA. In a 5-3 ruling, the justices ruled that cities can sue if they can provide a direct, causal relationship between lending practices and injuries the local governments incur. (RELATED: SCOTUS Rules Cities Can Sue Banks Over Discriminatory Lending)

    Philadelphia is accusing Wells Fargo of pushing minority groups into higher-cost loans than caucasian borrowers, even if minority borrowers qualified for lower-costs loans. The lawsuit claims that black borrowers were over twice as likely to receive a higher-cost, riskier loan than white cohorts. The city says the same relationship presented itself with hispanic borrowers.

    Wells Fargo argues that the city’s claims against the bank are “unsubstantiated” and furthermore fail to accurately reflect how the bank operates, Reuters reports.

    Monday’s lawsuit is the latest in a troubled saga for Wells Fargo.

    The bank landed in hot water in September, 2016, when it was uncovered that the bank was participating in illegal retail lending practices.

    Bank employees issued 565,000 lines of credit and opened 1.5 million bank accounts for customers without their consent from 2011-2014, and sometimes created false email addresses to sign them up for banking services in order to pad their numbers. Some 14,000 of those credit accounts accrued over $400,000 in fees alone. (RELATED: DOJ Demands Wells Fargo Whistleblower Testify In Formal Investigation)

    Initially, Wells Fargo was slapped by the Consumer Financial Protections Bureau (CFPB) with a $185 million fine — the largest ever levied by the federal agency — after finding these practices were rampant throughout Wells Fargo since 2011. (RELATED: CFPB Fines Wells Fargo $185 Million For Opening Fake Accounts)

    Former Chairman and CEO of Wells Fargo John Stumpf faced congressional investigation, which ultimately led the bank’s board to force the executive to cough up $41 million in assets and earnings he accrued from his decades-long tenure. The move, however, proved not harsh enough for members of Congress and the public. Stumpf announced he was stepping down as chairman and CEO Oct. 12, 2016.

    The new CEO of Wells Fargo, Tim Sloan, took over for Stumpf in December, 2016.

    http://dailycaller.com/2017/05/15/philadelphia-sues-wells-fargo-over-race-based-discrimination/

    Philadelphia Sues Wells Fargo Over Race-Based Discrimination
    Philadelphia sued Wells Fargo Monday, claiming the American banking icon engaged in predatory lending practices in violation of the federal Fair Housing Act (FHA). The lawsuit comes on the heels o
    dailycaller.com
  • Wells Fargo steered blacks and Latinos toward costlier mortgages, Philadelphia lawsuit alleges ~~~ L.A.Times ~~~ 5-16-17
    WFC still recovering from scandal in which Wells Fargo opened millions of unauthorized accounts in customers' names.
    Complaint draws parallels between the accused predatory lending and the problematic sales targets by saying there was a lack of "internal controls" that could have prevented both issues.

    The city of Philadelphia has sued Wells Fargo, accusing the bank of discriminating against minority home buyers.

    The complaint, filed Monday in a federal court in Pennsylvania, alleges that Wells Fargo violated the Fair Housing Act of 1968 by "steering" minority borrowers into mortgages that were more expensive and riskier than those offered to white borrowers, according to court documents.

    The city of Philadelphia has sued Wells Fargo, accusing the bank of discriminating against minority home buyers.

    The complaint, filed Monday in a federal court in Pennsylvania, alleges that Wells Fargo violated the Fair Housing Act of 1968 by "steering" minority borrowers into mortgages that were more expensive and riskier than those offered to white borrowers, according to court documents.

    The lawsuit says Wells Fargo is among the major banks with a "history of redlining" in Philadelphia, a practice traced back to the 1930s that involves denying credit to borrowers in certain communities because of their race or ethnicity.

    The complaint says that between 2004 and 2014, African American borrowers were twice as likely to receive high-cost loans when compared with white borrowers with similar credit backgrounds. Latino borrowers were 1.7 times as likely to receive costly loans when compared with white borrowers, the lawsuit claims.

    Many borrowers also were rejected later when they applied for credit that would have allowed them to refinance those more-expensive loans, according to the complaint. As a result, minority borrowers faced higher rates of foreclosure — a pattern that also hurt the city by leading to lower property taxes and more frequent incidents of vandalism and crime, the lawsuit claims.

    Monday's lawsuit comes just two weeks after the U.S. Supreme Court ruled that cities have standing to sue banks for predatory lending practices, on the grounds that the cities also can incur financial damages, such as reduced tax revenue.

    In that case, Miami sued Bank of America and Wells Fargo, arguing that discriminatory lending practices led to higher rates of default for minority borrowers.

    Miami, represented by the same lawyers handling the Philadelphia case, claimed that the banks in turn caused financial harm to the city by leading to lower property taxes and requiring the city to provide services to struggling borrowers.

    Although the Philadelphia investigation has been underway for more than a year, the city waited until after the Supreme Court decision to ensure that it would have legal standing to sue, according to Benjamin Field, deputy city solicitor for Philadelphia.

    Wells Fargo has faced similar claims of mortgage discrimination from bank regulators and federal prosecutors.

    In 2012, the bank agreed to pay $175 million to settle a case bought by the Department of Justice, which alleged the bank steered thousands of African American and Latino borrowers into loans that were more expensive than those offered to similarly qualified white borrowers.

    The Office of the Comptroller of the Currency, the nation’s main bank regulator, said at the time it had found evidence of discriminatory lending.

    The bank did not admit wrongdoing in that case and said it settled the matter to avoid costly litigation.

    News of the Philadelphia lawsuit against Wells Fargo was first reported by Reuters.

    http://www.latimes.com/business/la-fi-wells-fargo-philadelphia-20170516-story.html

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  • To all the Longs - Do not seek to profit from this deeply corrupt company. There are far better banks to invest in. This company should suffer for the pain they caused others. I was not affected personally, but when I learned they fired the whistleblowers I was outraged. I cancelled all my accounts (home mortgage, car loan and checking/savings).
  • ...................... "If corporations truly were people, the person known as Wells Fargo would be behind bars" ........................
    ....................................................... The Des Moines Register .................. May 9, 2017 .....................................................

    Who will hold Wells Fargo accountable?

    GOP attacks the regulators, not the banks

    Sen. Elizabeth Warren had it right last fall when, in the wake of the bureau’s actions against Wells Fargo, she said, “The only way that Wall Street will change is if executives face jail time when they preside over massive frauds. Until then, it will be business as usual, and at giant banks like Wells Fargo, that seems to mean cheating as many customers, investors and employees as they possibly can.”

    If corporations truly were people, the person known as Wells Fargo would be behind bars.

    The full breadth and depth of the fraud that the San Francisco-based bank has perpetrated on the public has yet to be determined, but here’s what we know so far:

    Last September, in the wake of an investigation by the Consumer Fraud Protection Bureau, Wells Fargo acknowledged that employees had engaged in a widespread practice resulting in 2 million unauthorized bank and credit card accounts being set up for customers so the workers could meet their sales goals. There were up to 12,630 unauthorized accounts opened in Iowa alone, and the bank was forced to pay $185 million in regulatory penalties. At the time, Wells Fargo said it had fired 5,300 employees for fake accounts set up between 2011 and 2016.

    In November, Wells Fargo’s newly appointed CEO, Timothy Sloan, met with The Des Moines Register’s Editorial Board and said the bank intended to do everything it could to win back the trust of its customers. “We’re going to make it right,” he said. But at that same meeting, Sloan made it clear the bank was not going to provide its wronged customers with a waiver that would enable them to take their grievances to court rather than a private arbitrator. In fact, Wells Fargo subsequently went to court and challenged some of the lawsuits that already had been filed, citing the mandatory-arbitration clause in customers’ contracts with the bank.

    One month ago, the bank’s board of directors issued a report that indicates the fraudulent-accounts scheme dated back at least 15 years ago, and that Wells Fargo’s top executives were aware of the practice in 2002.

    In addition to setting up unauthorized accounts for the bank’s own customers, the sales staff had also been engaged in other questionable practices. One branch manager had a teenage daughter with 24 Wells Fargo accounts; an adult daughter with 18 accounts; a husband with 21 accounts; a brother with 14 accounts; and a father with four accounts.

    Another employee opened 40 to 50 accounts per week for non-existent individuals, setting up the accounts under fake names and funding them with cash diverted from genuine bank accounts of actual customers. Once the worker collected his sales commissions, the money was returned to the customers' accounts.

    And now, according to newly disclosed court records, Wells Fargo’s Latino employees were allegedly dispatched to street corners, factories and construction sites as part of a regular sales initiative called “Hit the Streets Thursday.” The workers were tasked with tracking down undocumented immigrants who could be persuaded to open up bank accounts so they could cash their paychecks. Former employees have filed sworn statements attesting to the practice, but a company spokesman says the allegations are “offensive” and describe practices that “are inconsistent with our policies (and) values.”

    Last year, former chairman and chief executive John Stumpf resigned from Wells Fargo with a $133 million retirement package. Carrie Tolstedt, the former executive in charge of Wells Fargo’s community banking division, departed with a $120 million golden parachute. Since then, the bank has decided to reclaim $28 million from Stumpf and $47 million from Tolstedt — leaving them with $105 million and $73 million, respectively.

    Wells Fargo is overseen, at least in theory, by a board of directors. The individual board members earn $300,000 to $480,000 in cash and stock every year. Last month, at the annual shareholders’ meeting, the shareholders voiced their displeasure with the still-growing scandal, but ultimately approved the election of all of the bank’s proposed directors.

    No doubt some at Wells Fargo feel the bank has been punished enough. But has anyone — aside from the hundreds of fired, low-level employees who appear to have been doing their bosses’ bidding — really been held accountable for one of the biggest banking scandals of modern times?

    The Trump administration, as feared, is now going after the Consumer Financial Protection Bureau, which helped blow the whistle on Wells Fargo. The Justice Department filed a brief with a federal appeals court last month, arguing that the structure of the bureau violates the Constitution, and GOP lawmakers are backing legislation to stop the bureau from establishing new consumer protections on pre-paid credit cards.

    Sen. Elizabeth Warren had it right last fall when, in the wake of the bureau’s actions against Wells Fargo, she said, “The only way that Wall Street will change is if executives face jail time when they preside over massive frauds. Until then, it will be business as usual, and at giant banks like Wells Fargo, that seems to mean cheating as many customers, investors and employees as they possibly can.”

    http://www.desmoinesregister.com/story/opinion/editorials/2017/05/09/editorial-who-hold-wells-fargo-accountable/314397001/

    Editorial: Who will hold Wells Fargo accountable?
    The Consumer Fraud Protection Bureau helped blow the whistle on Wells Fargo's sales tactics, but some Republicans still want to dismantle to bureau .
    www.desmoinesregister.com
  • From Wells Fargo to Fyre Festival, the Scam Economy Is Entering Its Baroque Phase ______ NYTM _____ May 16, 2017
    __________ With Wells Fargo leading the way, "scamming" is now back in vogue in American business ______________

    Over the past few decades, as the regulatory and legal protections that once shielded consumers, workers and investors have been systematically rolled back, the character of American business has noticeably changed. Year by year, we’ve reverted toward a 19th-century style of capitalism, one in which the caveat is almost always up to the emptor. We’ve moved from an industrial economy to a consumer economy to a service economy to an information economy to what you might call a flagrant-exploitation economy — one in which branding and “storytelling” have replaced advertising and possibly even reality. It’s not just that we’re being sold the sizzle more than the steak. It’s that we’re being sold the sizzle instead of and at the expense of the steak.

    Take, for instance, the doomed Fyre Festival, which lured people to the Bahamas late last month with promises of luxury accommodations, gourmet food and frolicsome models, only to greet them with gravel pits, collapsing tents, swarms of sand flies and sad cheese sandwiches in plastic boxes. This event was many things: an international laughingstock, an object lesson in hubris, a surprise survivalist adventure and a handy repository for all the schadenfreude in the world. It was also — at least according to a tweet from one of its chief organizers, the rapper Ja Rule — “NOT A SCAM.” Notwithstanding this heartfelt denial, Ja Rule (whose real name is Jeffrey Atkins) and his co-organizer, the 25-year-old serial entrepreneur Billy McFarland, were hit with several lawsuits, including a $100 million class action claiming that the music festival was, in fact, “nothing more than a get-rich-quick scam.”

    McFarland has since admitted that he was “naïve” in thinking he could build a functioning festival village from scratch in an island country not his own and too slow in realizing he was in over his head. But the class action claims that McFarland and Atkins intentionally defrauded ticket buyers — that they “were knowingly lying about the festival’s accommodations and safety and continued to promote the event and sell ticket packages” after they knew they couldn’t deliver — even warning performers and celebrities in advance not to bother coming. The case would seem to hinge, in part, on the question of what the organizers knew and when they knew it. In other words: Did they set out to scam ticket buyers, or did they just screw up?

    Right now seems like a good time to ask this question in general: Where is the line, exactly, between a poorly produced but well-advertised product and a con? More and more, we fully expect things to fall short of their advertising; if everything lived up to its hype, the world would be burdened with far fewer bad movies, miracle vitamins and optimistic campaign promises. Not long ago, I booked a plane flight using miles; when the flight was canceled because of bad weather, the airline simply kept the miles. Wells Fargo employees spent five years creating millions of fake accounts for unsuspecting customers in order to charge them additional fees; the year before this practice was uncovered, a news release introduced the bank’s new brand campaign as one that would “eschew product promotion for storytelling.” Our president has agreed to pay millions in fraud settlements to thousands of students of his “university,” with its $35,000 “Gold Elite” program; his daughter, whom he has employed for much of her career, has published a book in which she writes about “cultivating authenticity” and presents herself as an accomplished businesswoman. It’s a brand that she’s selling — the have-it-all sizzle of a self-actualized career woman and loving supermom in fashionable shoes. Who cares whether, somewhere behind it, there may be the equivalent of an undeveloped gravel pit and some unboxed disaster tents?
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  • Why will the SEC not reveal the name of the credit card company which colluded with WFC? Does this constitute an obstruction to Rule of Law?

    It shows you that the problem stems from the wall streeter schmucks, and it all happened under the Bama term.
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  • Judge says he may reject parts of Wells Fargo accounts settlement ...................... Reuters .................. May 17, 2017
    He said the settlements are too low and said "there may be an argument" that the settlement gave too much protection to executives and directors.

    A federal judge signaled that he may reject parts of Wells Fargo & Co's (WFC.N) proposed $142 million settlement with customers for whom it opened millions of unauthorized accounts.

    In an order made public on Tuesday evening, U.S. District Judge Vince Chhabria in San Francisco said he was "strongly inclined" to reject the settlement's provision for an injunction barring customers from pursuing other claims against the bank.

    He also said he was "tentatively" inclined to carve out claims related to customer overdrafts, and said "there may be an argument" that the settlement gave too much protection to executives and directors.

    The judge also ordered lawyers for the customers and Wells Fargo to address several issues, including whether the bank should owe punitive damages, and how the estimated number of bogus accounts rose to 3.5 million, a number suggested by the customers' lawyers last Thursday, from 2.1 million.

    Wells Fargo spokesman Jim Seitz said on Wednesday that the San Francisco-based bank is preparing a response.

    "We believe this agreement is an important step in our journey to make things right for our customers and rebuild trust," he added in an email.

    Lawyers for the plaintiffs did not immediately respond to requests for comment.

    Chhabria is scheduled on Thursday to consider whether to preliminarily approve the accord.

    He has received several objections contending that the settlement is too broad and that the payout is too low.

    The settlement came in the wake of a national scandal in which Wells Fargo employees were found to have opened bogus accounts in part because of pressure to meet sales goals.

    Wells Fargo agreed last September to pay $185 million in penalties to settle related charges by various authorities. Chief Executive John Stumpf and retail banking chief Carrie Tolstedt lost their jobs soon afterward.

    http://www.reuters.com/article/us-wells-fargo-accounts-idUSKCN18D1P9

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  • Wells Fargo suffers slump in muni bond underwriting for its bogus accounts scandal ............ Reuters .......... May 19, 2017

    Wells Fargo & Co is paying a price in the U.S. municipal bond market for the bogus customer accounts scandal that hit the bank last year and led to bans by some cities and states, an analysis of Thomson Reuters data shows.

    So far in 2017, Wells Fargo is in sixth place among senior underwriters of municipal bonds with 85 deals totaling nearly $8.13 billion, according to the data. During the same period in 2016, the bank ranked fourth with 134 issues totaling $12.74 billion.

    In September, Wells Fargo agreed to pay a $190 million settlement over its staff opening as many as 2 million accounts without customers' knowledge.

    California, along with Massachusetts, Chicago, and Ohio, suspended Wells Fargo last fall from pricing their negotiated bond sales due to the scandal.

    Municipal issuers typically sell their debt either by hiring underwriters to price their bonds or by setting a date and time for underwriters to bid on the debt, and then choose the lowest bid.

    Wells Fargo's ranking for negotiated deals slid to eighth place between Jan. 1 and May 17 from fourth place during the same period in 2016. The bank was the bookrunning underwriter on 45 deals totaling $5.2 billion so far this year, compared to 79 deals totaling $9.25 billion in 2016.

    The bank's ranking drop for winning competitively bid issues was not as steep, falling to fifth place with 40 deals totaling $2.92 billion so far this year from third place with 55 deals totaling $3.48 billion last year.

    "Public Finance is an important business for Wells Fargo with many opportunities for growth," Philip Smith, head of government and institutional banking at Wells Fargo, said in a statement to Reuters.

    "We are continuing to invest in the business. Despite current political challenges affecting league tables, our strong relationships and diversified municipal business model have us growing (revenue) 15 percent year over year," Smith said.

    CALIFORNIA DEAL

    California sanctioned Wells Fargo over the accounts scandal last year. In April, however, it beat out eight other banks to win a $635 million competitive deal in the state with a 2.811 percent interest rate, according to the California Treasurer's Office.

    "We had no choice," said California State Treasurer spokesman Marc Lifsher. California law requires the state to award competitive sales of general obligation bonds to the bidder with the lowest interest cost, Lifsher said.

    He added that the state plans to review the sanctions this fall, but as of Monday, the bank was "still in our dog house."

    “We’re continuing to pressure them to show us that they’ve cleaned up their act,” Lifsher said.

    http://www.reuters.com/article/us-usa-municipals-wells-analysis-idUSKCN18F2HZ

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  • Wells Fargo bogus accounts BALLOON to 3.5 million, nearly DOUBLE number previously believed ---- Reuters ---- 5-12-17

    Wells Fargo & Co (WFC.N) may have opened as many as 3.5 million unauthorized customer accounts, far more than previously estimated, according to lawyers seeking approval of a $142 million settlement over the practice.

    The new estimate was provided in a filing late Thursday night in the federal court in San Francisco, and is 1.4 million accounts higher than previously reported by federal regulators, in what became a national scandal.

    Keller Rohrback, a law firm for the plaintiff customers, said the higher estimate reflects "public information, negotiations, and confirmatory discovery."

    The Seattle-based firm also said the number "may well be over-inclusive, but provides a reasonable basis on which to estimate a maximum recovery."

    Wells Fargo spokesman Ancel Martinez in an email said the new estimate was "based on a hypothetical scenario" and unverified, and did not reflect "actual unauthorized accounts."

    Nonetheless, it could complicate Wells Fargo's ability to win approval for the settlement, which has drawn opposition from some customers and lawyers who consider it too small.

    "This adds more credence to the fact there is not enough information to assess whether the settlement is fair and adequate," Lewis Garrison, a partner at Heninger Garrison Davis in Birmingham, Alabama who represents some objecting customers, said in an interview.

    U.S. District Judge Vince Chhabria in San Francisco is scheduled to consider preliminary approval at a May 18 hearing.

    The accounts scandal mushroomed after Wells Fargo agreed last September to pay $185 million in penalties to settle charges by authorities including the U.S. Consumer Financial Protection Bureau.

    Wells Fargo employees were found to have opened the accounts in part because of pressure to meet sales goals.

    John Stumpf and Carrie Tolstedt, who were respectively the San Francisco-based bank's chief executive and retail banking chief, lost their jobs and had tens of millions of dollars clawed back over the scandal, and 5,300 employees were fired.

    The $142 million settlement covers accounts opened since May 2002. Wells Fargo originally agreed to pay $110 million covering accounts since 2009, but boosted the payout after discovering more problems.

    Keller Rohrback said the settlement "fairly balances the risks" of further litigation, including the possibility their clients might lose, against the benefits.

    Garrison's firm said in a filing the accord underestimated the potential maximum damages by at least 50 percent, and did not properly address whether Wells Fargo committed identity theft by using customers' personal data to open accounts.

    http://www.reuters.com/article/us-wells-fargo-accounts-idUSKBN1882UV

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  • Wells Fargo accused of opening TWICE as many fake accounts as admitted ~~~~~~~~ CBS News ~~~~~~~~ May 12

    SAN FRANCISCO - Lawyers suing Wells Fargo (WFC) on behalf of aggrieved customers say the bank may have opened about 3.5 million unauthorized accounts, far more than the figure bank and regulators disclosed last year.

    In a court filing late Thursday, lawyers representing customers told a federal judge in San Francisco that they believe bank workers created 3.5 million unauthorized accounts over the last 15 years, "based on public information, negotiations, and confirmatory discovery." The bank had put the total at about 2 million possibly unauthorized accounts.

    Bank spokesman Ruben Pulido said the new claim was unverified and only an estimation.

    "The unauthorized account numbers reported in the filing are estimates made by plaintiffs' attorneys based on a hypothetical scenario and have not been verified," Pulido said. "The number of unauthorized accounts estimated in the filing do not reflect actual unauthorized accounts."

    Pulido declined further comment and the bank has not disclosed its own revised estimation.

    The bank said last month said an internal review showed bogus accounts opening as far back as 2002.

    San Francisco-based Wells Fargo has seen declines in new account openings and bank traffic, and has been working to restore customers' trust since the practices came to light. The biggest scandal in the bank's history led to the abrupt retirement of its CEO, John Stumpf. In response to the scandal, Wells has changed its sales practices, ousted other executives and called tens of millions of customers to check on whether they truly opened the accounts in question.

    The bank initially agreed to pay $110 million to settle claims dating back to 2009. But it agreed to add $32 million to the settlement to include claims starting in May 2002.

    The new estimate was based on the expanded time frame and was included as part the customers' lawyers request that the judge approve the proposed settlement. A hearing is scheduled for next week.

    After paying attorneys' fees, the $142 million will first go to cover any customers' out-of-pocket losses or fees that they may have incurred due to the unauthorized accounts. All remaining money will be split among the affected customers.

    http://www.cbsnews.com/news/wells-fargo-accused-of-opening-twice-as-many-fake-accounts-as-admitted/

    Wells Fargo accused of opening twice as many fake accounts as admitted
    The bank has admitted to opening 2 million accounts without customers' knowledge; a new suit claims it is 3.5 million
    www.cbsnews.com
  • Total Number Of Bogus Wells Fargo Accounts Could Be As High As 3.5 Million ________ Consumerist _______ 5-12-17

    When Wells Fargo finally acknowledged what some had been alleging for years — that bank employees may have opened up fake, unauthorized accounts in customers’ names — it estimated the total number of bogus accounts at around 2.1 million. However, recently filed court documents contend that there could be as many as 1.4 million additional bogus accounts.

    Wells Fargo is currently hashing out the details of a class-action settlement that it hopes will resolve the dozen or so pending federal lawsuits brought by customers in recent years. The settlement — originally valued at $110 million, before swelling to $142 million a month later — involves a lawsuit brought by a Wells Fargo customer in 2015, more than a year before the bank revealed that employees may have been creating these fraudulent accounts to game the Wells Fargo system of sales quotas and incentives.

    The revelation of the potential higher number of fake accounts actually comes from a memorandum [PDF] filed by plaintiffs’ attorneys in support of the settlement.

    “Based on public information, negotiations, and confirmatory discovery, the parties estimate the number of unauthorized accounts for the period 2002-2017 is approximately 3.5 million,” explains the document.

    Wells claims that this figure of 3.5 million accounts is “based on a hypothetical scenario and [has] not been verified,” and even the plaintiffs’ attorney caution that “This number may well be over-inclusive.”

    Whatever the final number of bogus accounts turns out to be, it seems likely that it will be larger than the 1.5 million deposit accounts and 565,000 credit card accounts that Wells mentioned in its $185 million deal with federal, state, and local regulators in Sept. 2016.

    At the time, the bank was only acknowledging that this bad employee behavior went back as far as 2011. However, after repeated reports from bank regulators, and former employees, and even the bank’s internal investigation made it clear that this fraud had been going on for much longer, the bank expanded the settlement to cover customers all the way back to 2002. It would seem impossible that Wells could include nine additional years of fake accounts and not significantly increase that original 2.1 million figure.

    The settlement still needs to be approved by the court. Even though both Wells and the plaintiffs’ attorneys appear to agree that the $142 is a sufficient amount, the judge could determine that it is not adequate or that a more precise accounting of the number of potential class members is needed.

    [NOTE: This story has been updated to reflect that even though Wells Fargo has already agreed to pay $185 million to federal and state authorities, and is currently seeking to settle class actions for $142 million, the bank never actually admitted that its employees did or did not open any specific number of accounts.]

    https://consumerist.com/2017/05/12/total-number-of-bogus-wells-fargo-accounts-could-be-as-high-as-3-5-million/

    Total Number Of Bogus Wells Fargo Accounts Could Be As High As 3.5 Million
    When Wells Fargo finally acknowledged what some had been alleging for years — that bank employees may have opened up fake, unauthorized accounts in customers’ names — it estimated…
    consumerist.com
  • Philadelphia City Council Unanimously Votes to Replace Wells Fargo _____ Philadelphia Business Journal _____ May 12

    Philadelphia City Council voted unanimously to approve legislation to remove Wells Fargo as the bank handling the City’s $2 billion payroll. The legislation would authorize the city treasurer’s office to enter into an agreement with Citizens Bank to handle those services at the start of the next fiscal year in July.

    The bill was amended to include Citizens’ community development plan to develop initiatives for low to moderate income families, individuals and minority small businesses. A companion bill would allow for a transition period in which Wells Fargo would continue as the City’s depository until December 31, 2017.

    “Though we understand its business decision, Wells Fargo is certainly disappointed that the City of Philadelphia has decided to move payroll processing to another financial institution,” Wells Fargo said in a statement.

    Wells and its predecessor banks had the payroll account for decades. The San Francisco-based company, which is the region’s largest bank by deposits, noted its millions of dollars worth of community partnerships in Philadelphia in terms of donations and sponsorships to nonprofits and major events, as well as offering millions in loans and investments in support of affordable housing, community service, and economic development.

    http://www.nbcphiladelphia.com/news/local/Philadelphia-City-Council-Votes-Replace-Wells-Fargo-422107053.html

    Philly City Council Votes to Replace Wells Fargo
    Philadelphia City Council voted unanimously to approve legislation to remove Wells Fargo as the bank handling the City’s $2 billion payroll.
    www.nbcphiladelphia.com
  • Wells Fargo’s Possible Job Cuts Fuel Wall Street Analyst Debates ....................... Bloomberg ................... May 10. 2017
    ...................... Wells Fargo is poised to spread pain to the rank and file (for WFC management's crimes) .......................

    Wells Fargo & Co. is poised to spread pain to the rank and file.

    That’s the view from analysts, who say the bank’s leadership almost certainly must announce more aggressive cost-cutting targets Thursday when hosting an annual investor briefing. After a bogus-account scandal spooked new clients and crimped profitability, Wells Fargo will probably eliminate more branches and dismiss staff, analysts say. The question is how deep the cuts will go.

    Credit Suisse Group AG analysts predict Chief Executive Officer Tim Sloan will add $1.5 billion to his January pledge to eliminate $2 billion of expenses. At Jefferies Group, Barclays Plc and Sanford C. Bernstein & Co., analysts call for the target to rise by $1 billion.

    “An extra $1 billion could help,” Jefferies’s Ken Usdin told clients in a note Monday. “The expected upsizing of the two-year, $2 billion cost-savings effort is the most anticipated part."

    Sloan and his colleagues have repeatedly said they aren’t abandoning a key profitability target they declared half a decade ago, an efficiency ratio of 55 percent to 59 percent, even as the scandal fuels legal costs and makes it harder to lure new clients. In January, executives laid out a cost-cutting plan that included closing 400 branches through 2018.

    But in the first quarter, the efficiency ratio swung further in the wrong direction, rising to 62.7 percent -- the worst since at least the 2008 financial crisis. The figure compares noninterest expense to net income.

    “I want to make it very clear that operating at this level is not acceptable,” Sloan said on an April 13 conference call with analysts. “We are committed to improving.”

    Mark Folk, a company spokesman, declined to comment on what will be revealed at Thursday’s Investor Day.

    Sloan has said he’s focused on rebuilding shareholder and customer trust after authorities found last year that employees may have opened more than 2 million unauthorized accounts to hit sales goals. The bank has spent at least $445 million on fines, remediation, consultants and civil litigation. On Saturday, its top shareholder, billionaire Warren Buffett, said managers were “totally wrong” in not acting faster to halt abuses.

    Read more: Buffett says Wells Fargo ‘totally wrong’ in scandal approach

    Finding expense cuts to appease investors over the next 18 months will be difficult without also undermining revenue, analysts said. One area set for trimming is Wells Fargo’s network of 6,000 retail locations, according to Usdin. He said Wells Fargo has pared branches far less than rivals since 2011 -- closing 4 percent while the average competitor shut 12 percent.

    For the bank to hit its target efficiency range, the retail unit will have to trim $600 million to $800 million, according to Guggenheim Securities analyst Eric Wasserstrom.

    Such cuts would likely exacerbate the scandal’s impact on staff. After regulators fined the bank $185 million in September, past and current employees publicly complained they struggled for years to meet untenable sales quotas -- sometimes facing dismissal when they failed. The bank has since hired back about 1,000. More than 5,000 others were fired for allegedly cheating, such as by opening bogus accounts.

    Interest in this year’s Investor Day is especially high. During the April 13 call, and again at a shareholder meeting a few weeks later, Sloan and Chief Financial Officer John Shrewsberry punted questions on their strategy for growth, pointing to the event on May 11. Investors, meantime, have expressed frustrations, voting by narrow margins to re-elect board members.

    Read more: Wells Fargo board scrapes through

    “Investors want more color” on how the bank will reinvest the cost savings, Bernstein analyst John McDonald wrote last week.

    Executives should be prepared to discuss opportunities in wealth management and wholesale banking, the division that houses investment banking, Credit Suisse analyst Susan Roth Katzke said. Parts of those businesses, as well as credit cards, “have not reached full potential,” she wrote in a note last week.

    Wealth management profit jumped 22 percent to $623 million in the first quarter after declining 4.1 percent in 2016. In the wholesale division, it rose 10 percent in the quarter to $2.1 billion after changing little last year. Fees from credit cards were roughly the same at $945 million.

    Analysts also will be listening for comments on loan growth, particularly in commercial and industrial lending, mortgages and consumer and auto lending. And they’re awaiting an update on changes the bank is making to its sales practices and culture.

    Read more: Concerns over loan growth ahead of Wells Fargo’s Investor Day

    Costs from the scandal have been piling up. Shrewsberry said last month the bank will spend $70 million to $80 million per quarter on consultants and lawyers, increasing his earlier estimate by $20 million. Wells Fargo also was the only big U.S. bank to boost its estimate for potential legal costs at the end of the first quarter.

    “Probable and estimable” legal expenses beyond existing reserves were as much as $2 billion as of March 31, an increase of $200 million from year-end, a regulatory filing showed Friday. Meanwhile, Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley lowered estimates for their own risks.

    As for Wells Fargo’s retail bank, analysts said they want to hear how it might restore earnings. The unit saw profit drop 8.7 percent in the first quarter, pushing companywide results to miss estimates. The division’s contribution to total profit dropped more than 2 percentage points to 57 percent in 2016.

    “To support share price outperformance, management must convince investors that its community banking unit is on firmer footing,” Katzke wrote.

    https://www.bloomberg.com/news/articles/2017-05-10/wells-fargo-s-possible-job-cuts-fuel-wall-street-analyst-debates

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