Wells Fargo fires foreign exchange bankers for overcharging clients



By Andrea Riquier

Published: Nov 28, 2017 8:18 a.m. ET

Four bankers have been fired so far

A Wells Fargo bank branch in lower Manhattan.

The whispers among employees had been around for years. They finally heard some facts during a conference call in June led by managers in Wells Fargo & Co.'s foreign-exchange operation: Some of its business customers had been cheated, according to two employees who were on the call.

An internal review showed that out of roughly 300 fee agreements based on anything from informal handshakes to emails to signed documents, only about 35 companies were charged the actual price they had been offered for currency trades handled by Wells Fargo WFC, +3.00% , the employees say.

The phone call was part of a continuing cleanup that has led Wells Fargo to fire four foreign-exchange bankers and federal prosecutors to open their own investigation of the operation, people familiar with the matter have said.

An expanded version of this report appears at WSJ.com.



Wells Fargo's Foreign Exchange Bankers Overcharged Tons of Customers To inflate their own bonuses.


By Hallie Detrick November 28, 2017

Bankers at Wells Fargo foreign exchange group have been intentionally overcharging customers to inflate their bonuses, the /Wall Street Journal / reported.

According to employees of the bank who spoke to the /Journal/, an internal review showed that only 35 of around 300 fee agreements agreed by the foreign-exchange operation had been charged accurately.

The findings about excess foreign-exchange charges applies only to deals with business customers. However, the bank is still recovering from a scandal in its retail banking division: in order to hit bonus targets, some employees opened accounts for customers without authorization, or invented customer details. The bank estimates that up to 3.5 million unauthorized accounts may have been opened.

/*Read: A Leading U.S. Regulator Wants to Loosen the Leash on Wells Fargo */

Wells Fargo (wfc, +3.04%) is the only major bank in the U.S. to award bonuses to currency traders based solely on how much revenue they bring in, the /Journal/ reports, a factor that may have incentivized overcharging customers. The bank said it has begun making changes to its compensation plan.

In addition to the internal audit that led to these revelations, Wells Fargo's foreign-exchange division is under investigation by federal law enforcement organizations including the Federal Reserve and the U.S. Attorney's Office for the Northern District of California.