Warren, senators press auditor KPMG to explain how it missed Wells Fargo’s illegal activity

U.S. Senator Elizabeth Warren, the Democrat from Massachusetts, is pressing Wells Fargo’s independent external auditor KPMG to reveal why it failed to identify massive unauthorized account-opening fraud at the bank.

Warren and three other senators have asked the global firm in a letter sent Thursday to explain what it knew, and when, around the fraud that resulted in a $185 million fine for Wells Fargo from the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Los Angeles City Attorney.

KPMG should know Wells Fargo & Co. WFC, -0.04% well. It’s been the bank’s independent external auditor for more than 85 years, and for Wachovia, before Wells Fargo swallowed that failing bank during the financial crisis.

Warren, along with fellow Democrats Sen. Bernie Sanders of Vermont, Sen. Mazie Hirono of Hawaii, and Sen. Edward Markey of Massachusetts, wrote KPMG CEO and Chairman Lynn Doughtie to raise questions about the firm’s failure to identify the millions of dollars in unauthorized bank, credit and debit card account openings that occurred while it audited the bank’s financial statements from between 2011 and 2015.

“KPMG conducted audits assessing Wells Fargo’s internal control over its financial statements ... but none of KPMG’s audits identified any concerns with illegal behavior,” wrote the senators.

KPMG’s annual audits of Wells Fargo for the years 2011 to 2015 gave a clean auditor’s opinion and said the bank had “maintained ... effective internal control over financial reporting,” the senators wrote.

“But your firm’s failure to identify the illegal behavior at Wells Fargo raises questions about the quality of your audits and the effectiveness of the implementation of these Sarbanes-Oxley requirements by the Public Company Accounting Oversight Board...”

http://www.marketwatch.com/story/warren-senators-press-auditor-kpmg-to-explain-how-it-missed-wells-fargos-illegal-activity-2016-10-27

Here's why it seems like the CEO of Wells Fargo can't remember anything

John Stumpf — the CEO of what was once Wall Street's most squeaky-clean bank, Wells Fargo — was in front of Congress on Tuesday answering for the fraudulent actions of thousands of employees.

It's yet another exhausting example of how people working at a bank got up in the morning, cheated and lied to their customers, went home to their families, ate dinner, were fairly normal, went to bed, and then got up in the morning to lie and cheat at work again.

Here's what happened at Wells Fargo: Under intense pressure to meet performance targets from above, thousands of employees opened fake accounts for clients.

The bank has agreed to pay a fine of $125 million (peanuts, really, at a company with a market capitalization of $235 billion), and thousands — excluding the executives who ran this division, of course — were fired.

In front of Congress, Stumpf was apologetic but weak and ineffectual.

He said Wells Fargo was dealing with the issue for a number of years before he was made aware of the issue. "If I could turn the clock back, I — we all — wish we had done something earlier," Stumpf said.

And then he said something that you could've seen coming. He couldn't remember details. Specifically, Stumpf said he couldn't remember when exactly in 2013 he learned about the issue. He was repeatedly asked if he had known before the Los Angeles Times published a story on the practices, but he didn't answer.

This, you see, is a Wall Street coping mechanism. It also happens to beget more disastrous behavior...

http://www.businessinsider.com/why-wells-fargos-stumpf-cant-remember-much-about-what-happened-2016-9

5,300 Wells Fargo employees fired over 2 million phony accounts

Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for.

That's exactly what happened to Wells Fargo customers nationwide.

On Thursday, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011.

The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.

"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.

Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said...

http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html

https://en.wikipedia.org/wiki/John_Stumpf

Bank of America, Citigroup, Wells Fargo, JPMorgan Chase Report Billions in Profit

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How a big US bank laundered billions from Mexico's murderous drug gangs

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