Wells Fargo Settles $37 million Suit Over Defrauding of Small and Medium Businesses
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Alex J. Rouhandeh serves as a special correspondent for Newsweek and is currently working toward his Master of Arts within the politics concentration at Columbia University's Graduate School of Journalism where he serves as the school's student representative in the University Senate and the Student Leadership Advisory Council of the Columbia Alumni Association.
Previously, he served as Newsweek's congressional correspondent, reporting from Capitol Hill and the campaign trail. Over his tenure with Newsweek, Alex has covered the speakership of Mike Johnson, the ouster of former Speaker Kevin McCarthy, the midterm elections of 2022, the Russo-Ukrainian War, and other key congressional stories of the Biden presidency.
Alex additionally provides coverage of Newsweek ownership and has produced investigative reporting on legal troubles facing the Olivet Assembly, a religious entity to which Newsweek's two owners formerly held ties.
Prior to covering Congress, Alex reported on matters of U.S. national security, holding press credentials for both the U.S. Capitol and the Department of Defense. Before joining Newsweek, Alex wrote for The American Prospect, Vice News, WDIV-TV NBC Local 4 News in Detroit, and other regional outlets.
His entry into the media industry began at Syracuse University where he majored in magazine journalism and produced award-winning coverage of the U.S.-Mexico border. At Syracuse, Alex also completed majors in policy studies as well as citizenship & civic engagement and was recognized as a Remembrance Scholar, one of the university's highest honors.
Alex was selected by the National Press Foundation to serve as a Paul Miller Washington Reporting fellow in 2024. He holds memberships with the National Press Club in Washington, D.C., the Society of Professional Journalists (SPJ), and the Investigative Reporters & Editors (IRE) organization.
Contact Alex with tips and feedback at a.rouhandeh@newsweek.com, and stay updated on his reporting by following him on social media at @AlexRouhandeh.
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Wells Fargo will shell out $37 million to settle a government lawsuit alleging the baking giant defrauded 771 businesses and banks, many of which were small- and medium-sized, Bloomberg reported.
The filing by the Department of Justice in New York federal court contended that the institution made tens of millions of dollars in revenue businesses on foreign-exchange (FX) transactions between 2010 and 2017.
According to the suit, Wells Fargo told these customers that it was charging them certain fixed rates but, in the background, incentivized its salespeople to "overcharge FX customers." The bank would allegedly conceal these overcharges, reaping the financial benefits of them.
"As a result of the improper incentives and lack of oversight, a culture developed in which Wells Fargo FX sales specialists were comfortable repeatedly defrauding the bank's customers," the suit read. "FX sales specialists openly discussed and even celebrated transactions resulting in larger FX spreads than agreed to with customers and transactions generating large FX revenue."
This incident follows a string of penalties the bank has faced since its 2016 fake account scandal. Here, signage with logo at headquarters of Wells Fargo Capital Finance, the commercial banking division of Wells Fargo...This incident follows a string of penalties the bank has faced since its 2016 fake account scandal. Here, signage with logo at headquarters of Wells Fargo Capital Finance, the commercial banking division of Wells Fargo Bank, in the Financial District neighborhood of San Francisco, California, September 26, 2016.Photo via Smith Collection/Gado/Getty Images
According to the settlement, most of the funds will be paid as restitution to the impacted customers.
This continues a string of incidents over the years in which Wells Fargo has faced legal action for alleged misbehavior.
Earlier this month the bank was hit with a $250 million fine after failing to implement a mortgage loss mitigation program tied to a 2018 action by the Office of the Comptroller of the Currency. This request stemmed back to a 2016 scandal under which employees of the bank opened millions of accounts in customers' names without their knowledge to meet sales goals between 2002 and 2016.
Since then, the bank has paid out over $4 billion in penalties.
The actions of the bank have caused a stir in Washington. Democratic Massachusetts Senator Elizabeth Warren penned a recent letter to Federal Reserve Chair Jerome H. Powell asking him to force the bank to split its personal banking activities from its Wall Street Business interests.
"Every new report of scandal and ongoing noncompliance by Wells Fargo represents a giant financial institution squeezing consumers to pad profits for its executives," she wrote. "The only way these consumers and their bank accounts can be kept safe is through another institution—one whose business model is not dependent on swindling customers for every last penny they can get. The Fed has the power to put consumers first, and it must use it,"
Newsweek contacted Wells Fargo requesting a statement but did not hear back from the bank in time for publication.
Alex J. Rouhandeh serves as a special correspondent for Newsweek and is currently working toward his Master of Arts within the politics concentration at Columbia University's Graduate School of Journalism where he serves as the school's student representative in the University Senate and the Student Leadership Advisory Council of the Columbia Alumni Association.
Previously, he served as Newsweek's congressional correspondent, reporting from Capitol Hill and the campaign trail. Over his tenure with Newsweek, Alex has covered the speakership of Mike Johnson, the ouster of former Speaker Kevin McCarthy, the midterm elections of 2022, the Russo-Ukrainian War, and other key congressional stories of the Biden presidency.
Alex additionally provides coverage of Newsweek ownership and has produced investigative reporting on legal troubles facing the Olivet Assembly, a religious entity to which Newsweek's two owners formerly held ties.
Prior to covering Congress, Alex reported on matters of U.S. national security, holding press credentials for both the U.S. Capitol and the Department of Defense. Before joining Newsweek, Alex wrote for The American Prospect, Vice News, WDIV-TV NBC Local 4 News in Detroit, and other regional outlets.
His entry into the media industry began at Syracuse University where he majored in magazine journalism and produced award-winning coverage of the U.S.-Mexico border. At Syracuse, Alex also completed majors in policy studies as well as citizenship & civic engagement and was recognized as a Remembrance Scholar, one of the university's highest honors.
Alex was selected by the National Press Foundation to serve as a Paul Miller Washington Reporting fellow in 2024. He holds memberships with the National Press Club in Washington, D.C., the Society of Professional Journalists (SPJ), and the Investigative Reporters & Editors (IRE) organization.
Contact Alex with tips and feedback at a.rouhandeh@newsweek.com, and stay updated on his reporting by following him on social media at @AlexRouhandeh.
Alex J. Rouhandeh serves as a special correspondent for Newsweek and is currently working toward his Master of Arts within the politics concentration at Columbia University's Graduate School of Journalism where he serves as the school's student representative in the University Senate and the Student Leadership Advisory Council of the Columbia Alumni Association.
Previously, he served as Newsweek's congressional correspondent, reporting from Capitol Hill and the campaign trail. Over his tenure with Newsweek, Alex has covered the speakership of Mike Johnson, the ouster of former Speaker Kevin McCarthy, the midterm elections of 2022, the Russo-Ukrainian War, and other key congressional stories of the Biden presidency.
Alex additionally provides coverage of Newsweek ownership and has produced investigative reporting on legal troubles facing the Olivet Assembly, a religious entity to which Newsweek's two owners formerly held ties.
Prior to covering Congress, Alex reported on matters of U.S. national security, holding press credentials for both the U.S. Capitol and the Department of Defense. Before joining Newsweek, Alex wrote for The American Prospect, Vice News, WDIV-TV NBC Local 4 News in Detroit, and other regional outlets.
His entry into the media industry began at Syracuse University where he majored in magazine journalism and produced award-winning coverage of the U.S.-Mexico border. At Syracuse, Alex also completed majors in policy studies as well as citizenship & civic engagement and was recognized as a Remembrance Scholar, one of the university's highest honors.
Alex was selected by the National Press Foundation to serve as a Paul Miller Washington Reporting fellow in 2024. He holds memberships with the National Press Club in Washington, D.C., the Society of Professional Journalists (SPJ), and the Investigative Reporters & Editors (IRE) organization.
Contact Alex with tips and feedback at a.rouhandeh@newsweek.com, and stay updated on his reporting by following him on social media at @AlexRouhandeh.
Alex J. Rouhandeh serves as a special correspondent for Newsweek and is currently working toward his Master of Arts within ...
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