Federal prosecutors are in the early stages of probing Wells Fargo sales practices that resulted in the bank paying $185 million in fines last week, the Wall Street Journal reported Wednesday, citing people familiar with the matter.
The investigation is being handled by the U.S. Attorney’s Offices for the Southern District of New York and the Northern District of California, the Journal reported. Prosecutors haven’t determined if a case should be pursued and whether it would civil or criminal if they did.
Prosecutors have subpoenaed the bank for documents and materials, the Journal said.
A Wells Fargo spokesman contacted by the Observer declined to comment. The U.S. Attorney’s Office in New York also declined to comment; The U.S. Attorney’s Office for Northern California could not be reached for comment.
The San Francisco-based bank agreed last week to pay $185 million in fines to settle claims of wrongdoing in its sales practices. Regulators said the bank’s employees engaged in a “widespread illegal practice” by secretly opening more than 2 million deposit and credit card accounts that may not have been authorized by customers to meet sales goals.
In an email sent to customers on Wednesday, Wells Fargo CEO John Stumpf acknowledged “recent news” that the bank opened unwanted accounts and said the conduct was “simply not acceptable.”
“Last week’s news did not reflect Wells Fargo at its best,” Stumpf wrote. “Your trust and confidence in us is something we hold near and dear.”
Wells Fargo made national headlines this week when it announced plans to eliminate sales goals at the start of next year. But the bank says it hasn’t fully figured out how it will compensate bankers in its branches and call centers once it makes the change.
Wells Fargo spokeswoman Richele Messick told the Observer the company is “working through the details” of how bankers will be paid once the bank abandons sales goals.
“We will ensure our team members receive fair compensation, as we do today,” she said.
The decision is expected to affect about 78,000 employees, or roughly 30 percent of the company’s 268,000 workforce.
Affected employees work in the bank’s call centers in the U.S. and elsewhere, including some at Wells Fargo’s Customer Information Center on W.T. Harris Boulevard. It also affects some employees who work in the bank’s roughly 6,000 U.S. branches in 39 states and Washington, D.C.
Across Charlotte, Wells Fargo’s largest employment hub, the company has about 23,000 employees in branches and across various lines of business. It was not immediately clear how many of those are affected by Tuesday’s announcement.
Messick said the bank is not eliminating sales goals for all personnel who sit in branches, such as mortgage bankers and financial advisers.
Bonuses can represent an important slice of compensation for bankers in branches, who can make far less than executives.