Illinois suspends Wells Fargo investments over sales fraud
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. –
Pedestrians walk past a branch of Wells Fargo bank in downtown Los Angeles, California, on October 3.