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Wells Fargo altered documents about business clients

Wells Fargo recently discovered that some workers altered documents about business customers, raising new concerns ab...

Posted: May 17, 2018 6:59 PM
Updated: May 17, 2018 6:59 PM

Wells Fargo recently discovered that some workers altered documents about business customers, raising new concerns about the embattled bank's internal system of checks-and-balances.

The improper activity took place in 2017 and early 2018 and was brought to light by multiple Wells Fargo employees who alerted management, a person familiar with the matter told CNNMoney.

The document altering happened in Wells Fargo's business banking group, which caters to medium-sized businesses with annual sales of $5 million to $20 million.

A Wells Fargo investigation found that some employees may have broke with procedure when they changed forms that are required by anti-money laundering laws, the person said. So far, the probe found the employees were not trying to hurt customers or falsify data, the person said.

Wells Fargo has been trying -- and largely failing -- to turn the page on a series of scandals that have rocked the bank for the past 20 months and led to unprecedented sanctions.

News of the document altering, first reported by The Wall Street Journal, drove Wells Fargo shares down nearly 2%.

A Wells Fargo spokesman acknowledged in a statement on Thursday that "some" employees were "not following proper procedures in the filling out of required customer forms."

"No customers were negatively impacted, no data left the company and no products and services were sold," Wells Fargo said.

Related: Facebook, Uber, Wells Fargo: 3 corporate apology ads

Wells Fargo notified regulators at the Office of the Comptroller of the Currency about the matter and the agency is investigating, the person said.

The OCC said it does not comment on supervisory matters related to specific banks.

The Wells Fargo document altering took place as its business banking group had been racing to meet a June 30 deadline from the OCC to fix anti-money-laundering problems, the Journal reported.

In 2015, the OCC ordered Wells Fargo to clean up "critical internal control deficiencies" in the business banking group related to due diligence and customer risk assessment.

Federal laws require banks to know who their customers are and report suspicious activity, such as potential terrorism financing and money laundering, to the government.

It's not the first time Wells Fargo has been accused of improper activity with its business clients. A lawsuit filed last year alleged Wells Fargo's merchant services division ripped off vulnerable mom-and-pop businesses on credit card fees.

Wells Fargo has sought to fix internal problems that allowed the fake-accounts scandal to fester for many years. The bank eliminated sales goals, centralized monitoring systems, launched an ethics office and encouraged employees to speak up about bad behavior they witness.

"Over the past several months we've built more robust internal processes that reinforce our values," Wells Fargo said in the statement. "If we find any situations where behavior violates those values, we take swift action to correct."

Related: Wells Fargo owes $97 million to California workers

The latest bad news for Wells Fargo comes at a difficult time.

Last week, Wells Fargo signaled that the Federal Reserve is unlikely to lift huge sanctions on the bank until next year. The Fed penalties, instituted in February for "widespread consumer abuses," prohibit the bank from growing its balance sheet until it cleans up its act.

Jerome Powell, chairman of the Fed, also agreed to a request from Democratic Senator Elizabeth Warren that a public vote by top Fed officials will determine whether Wells Fargo's penalties are lifted.

Analysts said that elevating the Fed's Wells Fargo decision to the level of the top decisionmakers could extend the bank's stay in the penalty box.

"There needs to be an extended period -- measured in months -- without any new controversies at the bank before the Federal Reserve is likely to consider lifting the cap," Jaret Seiberg, financial services analyst at Cowen Washington Research Group, wrote to clients last week.

Wells Fargo recently launched an ad campaign aimed at regaining the trust of customers that has been lost during the scandals.

"Wells Fargo can't advertise itself out of these problems," said Stephen Beck, founder of management consulting firm cg42. "It needs to fundamentally change its approach to governance and put customers back at the center of its business."

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 68293

Reported Deaths: 1944
CountyConfirmedDeaths
Hinds5656118
DeSoto368031
Harrison253036
Madison244368
Rankin229235
Jackson228843
Jones191659
Forrest182056
Washington168942
Lee147941
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Lamar122614
Oktibbeha112739
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Panola106214
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Scott100320
Lafayette98317
Copiah95728
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Pike93836
Holmes90049
Grenada84921
Yazoo83312
Lincoln83241
Pontotoc8308
Simpson80330
Monroe80155
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Wayne77421
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Marshall7019
Marion68420
Union64316
Adams62925
Winston62316
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George5895
Pearl River55439
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Tishomingo4216
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Prentiss41710
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Smith40613
Clay39714
Hancock39514
Jasper3889
Itawamba37510
Tippah36713
Tunica3517
Clarke32626
Montgomery3265
Lawrence3228
Yalobusha31510
Humphreys29411
Quitman2701
Carroll26111
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Perry2437
Amite2356
Webster23512
Kemper23414
Jefferson Davis2336
Wilkinson21113
Stone2055
Sharkey1995
Jefferson1957
Benton1431
Choctaw1354
Franklin1312
Issaquena262
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 99926

Reported Deaths: 1781
CountyConfirmedDeaths
Jefferson13258244
Mobile10517207
Montgomery6835149
Madison544734
Tuscaloosa423076
Baldwin365125
Unassigned363064
Shelby330936
Marshall318937
Lee270047
Morgan241118
Etowah216232
DeKalb183013
Calhoun180717
Elmore173138
Walker153964
Houston141912
Russell13872
St. Clair135418
Limestone134913
Dallas133123
Franklin128820
Cullman122712
Colbert120716
Lauderdale118919
Autauga117421
Escambia108717
Talladega104814
Jackson10144
Tallapoosa86579
Chambers84438
Dale83525
Clarke82610
Blount8124
Chilton8097
Butler76736
Coffee7646
Covington73720
Pike7087
Marion58026
Barbour5765
Lowndes57324
Marengo56515
Hale47826
Bullock46611
Winston45711
Perry4454
Washington44312
Bibb4425
Wilcox43210
Monroe4215
Pickens4049
Randolph40310
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Sumter36418
Lawrence3512
Macon33914
Crenshaw3265
Choctaw28712
Cherokee2758
Henry2643
Clay2635
Geneva2631
Greene25211
Lamar2292
Fayette2125
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Coosa1033
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