Wells Fargo executives and board members have been slapped with a lawsuit alleging they were aware fake accounts were being opened in millions of customers’ names. Michelle Roberts reports.
Wells Fargo executives and board members have been slapped with a lawsuit alleging they were aware fake accounts were being opened in millions of customers' names.
The lawsuit was filed Thursday in San Francisco County Superior Court by lawyers representing Wells Fargo shareholder William Sarsfield, and comes after California and federal regulators fined the bank a combined $185 million for the alleged unauthorized accounts.
Sarsfield is being represented by Burlingame-based Cotchett, Pitre & McCarthy, LLP.
The complaint alleges Wells Fargo's senior management allowed the bank to commit a major fraud on consumers, which "resulted in serious harm to the bank."
"We're asking for a claw back. In other words, that those executives that knew what was gong on have to give back those bonuses because that is really the public's money," Attorney Joe Cotchett said.
Wells Fargo declined to comment on the lawsuit.
The Consumer Financial Protection Bureau said Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may have not been authorized by customers. Money in customers' accounts was transferred to these new accounts without authorization. Debit cards were issued and activated, as well as PINs created, without telling customers.
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In some cases, Wells Fargo employees even created fake email addresses to sign up customers for online banking services.
The San Francisco-based bank will pay $100 million to the CFPB, a federal agency created five years ago; $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.
Wells Fargo said the agreements were made with its customers in mind and out of a desire to show accountability.
"Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us," the company said in a statement in response to the fines. "Wells Fargo is committed to putting our customers' interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request."
Wells Fargo said they've refunded $2.6 million in fees associated with products that were opened without authorization.
