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Wells Fargo-The Fake Accounts Scandal |
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INTRODUCTION |
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On February 02, 2018, the management of US-based banking and financial services company Wells Fargo & Co (WFC) faced the biggest setback in its history when the Federal Reserve (Fed) of the US barred further expansion of its operations until the issues related to opening of fake accounts had been settled. The Fed restricted the bank from taking any action that would boost the value of its assets beyond what they had been in December 2017 (at US$ 1.95 trillion).
As per the statement issued, the management of bank would not be able expand banking operations until the Fed was satisfied with the initiatives it had taken based on the Fed’s suggestions. However, within the existing business assets, the bank would be allowed to perform its regular banking activities. After the Fed’s decision was announced, the WFC stock fell by 6% on February, 02, 2018. Fed also instructed the bank to make changes in its management board. “We cannot tolerate pervasive and persistent misconduct at any bank ……” said Janet Yellen, Chairwoman of Fed ....
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