We are in day six of Wells Fargo's precipitous fall from grace and it's beginning to seem like the bank is in a self-ideated nightmare without end. And it just keeps getting scarier.
Revelations of bold, dumb and endemic fraud and turnover in its community banking division gave way to reports of oddly-timed golden "retirement" parachutes, gave way to announcements of plans to fix things at a glacial pace, gave way to an eerie silence emanating out of Omaha.
And, sure, next week Wells Fargo CEO John Stumpf is going to go sit in front Congress and take a theatrical verbal lashing, but at least Wells Fargo hasn't heard anything from Johnny Law...so they've got that going for 'em.
Oh wait, what's that you say, WSJ?
Federal prosecutors are in the early stages of an investigation into sales practices at Wells Fargo & Co. that led to the bank being hit last week with a $185 million fine, according to people familiar with the matter.
Well, "early stages" isn't the worst thing that Stumpf and Co. have heard this week. And this is a California bank we're talking about, so it's not like "He-Who-Must-Not-Be-Named" is going to be involved. Sure, Wells Fargo has biffed every opportunity to wriggle out of this staggeringly dumb mess, but it hasn't even been a week. Surely, he couldn't be all that interested yet. He only gets involved with JPMorgan, Citi and BofA. And even then he prefers some real blood in the water.
Whatever, all Wells has to worry about are some NorCal US Attorney brahs...
The investigation is being conducted by the U.S. Attorney’s Offices for the Southern District of New York and the Northern District of California, these people said. Prosecutors have yet to decide if any case, should they decide to pursue one, would be along civil or criminal lines, the people said.
Oh SNAP, Wells Fargo, you're about to get some Preet Bharara up your ass!
And while we're sure that US Attorney for the Northern District of California, Brian Stretch, is a solid guy and a fine lawyer, we're also pretty certain that he hasn't been going full Captain Ahab for awhile now looking to drop criminal charges on a banker at a big bank. Preet, on the other hand, has been looking for somehting like this for awhile now. Ever since he lost out on jailing someone -anyone - from that whole Countrywide/BofA "Hustle" clusterfuck, it is not too hard to imagine that Preet has gone to sleep every night dreaming of bankers at one of the Big Four creating millions of fraudulent accounts and then moving actual customer money between them.
While in early stages, the investigation is focusing on whether someone senior within the bank directed employees to falsify documents in conjunction with the opening of accounts and products without consumers’ knowledge or authorization.
Prosecutors are also focusing on whether there was willful blindness to sales practices on the part of executives at the bank, these people said.
Preet Bharara calls this "porn."
Likely, Wells Fargo was the fourth out of four banks on his wish list to fuck up this badly, but Preet will take what he can get and it seems like he's about to get Wells Fargo.