Illi­nois sus­pends Wells Fargo in­vest­ments over sales fraud

The Myanmar Times - - Business -

THE state of Illi­nois is sus­pend­ing as much as US$30 bil­lion in in­vest­ment ac­tiv­ity with the em­bat­tled Cal­i­for­nia lender Wells Fargo over the bank’s fraud­u­lent sales prac­tices.

It was the sec­ond state to sus­pend some ties with the bank, af­ter Cal­i­for­nian au­thor­i­ties an­nounced last week that they were halt­ing cer­tain busi­ness re­la­tions with Wells Fargo for a year, in­clud­ing lu­cra­tive mu­nic­i­pal bond un­der­writ­ing.

Wells Fargo last month pub­licly ad­mit­ted that em­ploy­ees opened mil­lions of ac­counts in cus­tomers’ names with­out their knowl­edge in an ef­fort to meet de­mand­ing sales tar­gets.

The bank set­tled com­plaints over the ac­counts with US reg­u­la­tors and Los An­ge­les for $185 mil­lion.

Illi­nois said it will sus­pend in­vest­ment in Wells Fargo debt se­cu­ri­ties and any use of the bank as a bro­ker/dealer. The $30 bil­lion fig­ure rep­re­sents the value of the share of the state in­vest­ment port­fo­lio pass­ing through Wells Fargo over a year.

In heated hear­ings on Capi­tol Hill, US law­mak­ers have called for the res­ig­na­tion of the bank’s chair and CEO, John Stumpf, and de­nounced the bank for its per­ceived fail­ure to hold se­nior man­age­ment ac­count­able. –

Photo: AFP

Pedes­tri­ans walk past a branch of Wells Fargo bank in down­town Los An­ge­les, Cal­i­for­nia, on Oc­to­ber 3.

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