(Bloomberg) — Wells Fargo reached a settlement with the U.S. Justice Department over claims it overcharged commercial customers who used the bank’s foreign exchange services.
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The U.S. claims that from 2010 through 2017, Wells Fargo defrauded 771 customers — many of which were small or medium-size businesses and banks — by charging more than they claimed for foreign exchange transactions. The bank agreed to pay $37 million to settle a lawsuit filed by the government in federal court in New York on Monday.
Shares of Wells Fargo fell as much as 3.7%. The stock was down 2.2% to $46.87 at 1:12 p.m. in New York.
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Some FX sales employees received bonuses of more than $1 million a year, while failing to create safeguards and training procedures for how fixed-pricing agreements should be negotiated and implemented, according to the complaint.
“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 complaint says. “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.”
The bank didn’t immediately respond to a request for comment.
The case is U.S. v. Wells Fargo Bank N.A., 21-cv-08007, U.S. District Court, Southern District of New York (Manhattan).
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