California launches criminal probe into Wells Fargo account scandal
By Sarah N. Lynch
WASHINGTON (Reuters) - The California Attorney General's Office has launched a criminal investigation into Wells Fargo (WFC.N: Quote) over allegations it opened millions of unauthorized customer accounts and credit cards, according to a seizure warrant seen by Reuters.
Attorney General Kamala Harris authorized a seizure warrant against the bank that seeks customer records and other documents, saying there is probable cause to believe the bank committed felonies.
The probe marks the latest setback for the bank in a growing scandal that led to the abrupt retirement of its chief executive officer, monetary penalties, compensation clawbacks, lost business and damage to its reputation.
Wells Fargo spokesman Mark Folk did not immediately provide a comment in response to requests from Reuters, but was quoted in the Los Angeles Times as saying the bank is "cooperating in providing the requested information."
A spokeswoman for the California Department of Justice said she could not comment on the probe.
The bank's downward spiral kicked into high gear last month.
The U.S. Consumer Financial Protection Bureau and other regulators ordered the United States' third-largest bank by assets to pay $190 million in fines and restitution to settle civil charges that its branch staff created as many as 2 million accounts without customers' knowledge in order to meet internal sales targets.
The CFPB said that high pressure sales tactics and financial incentives fueled the fraud, which was largely carried out by low-level branch employees. About 5,300 of those employees were fired. Continued...