Wells Fargo is in talks with the Justice Department and the SEC about resolving the two-year investigations into the bank’s infamous fake-accounts scandal.
The “resolution” discussions with the DOJ and SEC are “preliminary and/or exploratory,” Wells Fargo said in a regulatory filing made public late Wednesday. Wells Fargo warned that there can be “no assurances” that the negotiations will be successful.
Wells Fargo also added $500 million to the war chest used to pay for its countless lawsuits. The bank raised the high end of potential losses linked to legal matters to $2.7 billion at the end of 2018. It cautioned the outcomes of legal actions are “unpredictable” and subject to considerable uncertainty.
Wells Fargo became a lightning rod for criticism when in September 2016 it admitted that workers opened millions of fake bank and credit card accounts to meet wildly unrealistic sales goals. The bank said it fired 5,300 employees over several years.
Even if it puts to bed the DOJ and SEC investigations, Wells Fargo still faces a litany of probes related to its sales tactics. The bank’s latest filing listed investigations from the Labor Department, various state attorneys general and state prosecutors.
“These matters are at varying stages,” Wells Fargo said.
Wells Fargo leaders reach $240 million settlement
Meanwhile, current and former Wells Fargo officials, including CEO Tim Sloan and his predecessor John Stumpf, reached a record-breaking preliminary settlement with shareholders, according to a court filing made public late Thursday.
Shareholders in the lawsuit alleged that Wells Fargo leaders “knew or consciously disregarded” the creation of millions of fake accounts and that the ensuing scandal “significantly damaged” the bank.