Wells Fargo pays $37 million to resolve Justice Department claims it defrauded currency customers
Wells Fargo signage on May 5th, 2021 in New York City.
Getty Images paid $37 million to settle a government lawsuit accusing the bank of defrauding hundreds of commercial customers.| Michael Ochs Archives | Getty Images
Wells Fargo paid $37 million to settle a government lawsuit accusing the bank of defrauding hundreds of commercial customers.
According to a Monday U.S. Justice Department lawsuit, 771 foreign exchange transactions were overcharged by the bank between 2010 and 2017. The bank’s shares fell by 1.4%.
The settlement is the latest regulatory matter resolved under Wells Fargo CEO Charles Scharf, who was hired in 2019 to clean up a litany of legal woes that began with a 2016 fake accounts scandal. Earlier this month, Wells Fargo was hit with a $250 million fine on the same day it announced the resolution of a Consumer Financial Protection Bureau consent order.
According to the suit, Wells Fargo informed commercial customers they were charged fixed rates but incentivised salespeople to “overcharge FX clients.”
According to the suit the bank concealed these overcharges and attracted millions of dollars in FX revenue, which it was not entitled.
The government stated that $35.3 million of the settlement will be used to restitution customers who were overcharged. The U.S. announced that Paul J. Kohn was the whistleblower in the 2016 case. He will receive $1.6million.
Emails seeking comments were not immediately returned by the bank.
The story is still developing. Keep checking back for more updates.
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