Wells Fargo was barred by California’s treasurer from being hired for another year because of the bank’s fraudulent account scandal, leaving the company largely cut off from underwriting work with one of the nation’s biggest municipal-bond issuers.
Bloomberg News reports that Treasurer John Chiang on Monday said he decided to leave the sanctions in place against the San Francisco-based bank, whose reputation has suffered because of revelations employees opened bogus accounts in customers’ names to meet sales quotas. Chiang’s decision will prevent his office from hiring Wells Fargo as an underwriter or investment broker. The ban was imposed in September 2016 and was set to lapse after a year.
The scandal at Wells Fargo prompted a nationwide backlash, with public officials in New York, Washington and Illinois also moving to sever ties to the bank. Chief Financial Officer John Shrewsberry previously said such measures have cost it “tens of millions of dollars” in revenue, and it has lost ground to other municipal-bond underwriters this year.
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