Wells Fargo probed by SEC over bogus accounts scandal


New York (AFP)

Wells Fargo hiked its estimates for potential legal costs from its bogus accounts scandal Thursday as it disclosed that US securities regulators are probing the bank over the issue.

The big US bank, which has been under fire since news of the scandal broke in September, lifted its estimate for the maximum cost for litigation costs to $1.7 billion from $1.0 billion at the end of June.

Wells Fargo also added the US Securities and Exchange Commission to the growing list of entities that are probing the scandal, which resulted in $185 million in fines after the bank was found to have opened some two million deposit and credit card accounts in customers' names without their approval.

Others investigating the bank include the US Department of Justice, various states attorneys general and a number of congressional panels.

Since news of the scandal broke, Wells Fargo has replaced its chief executive, eliminated the use of product sales goals for retail staff and promised to make whole customers who lost money or had their credit score lowered because of the chicanery.

On October 14, the bank reported a dip in third-quarter earnings, as well as September declines in newly opened checking accounts and customer visits with branch bankers.