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Wells Fargo in deeper trouble

It is estimated that Wells Fargo & Co had opened as many as 3.5 million unauthorized customer accounts, lawyers seeking approval for a $142 million settlement on the issue, have stated. The new estimate was provided in a filing in the federal court in San Francisco, and is 1.4 million accounts higher than previously reported by federal regulators. The process had become a national scandal. Wells Fargo, however, dismissed the new estimate as one based on a hypothetical scenario and unverified, and did not reflect actual unauthorized accounts. US district judge Vince Chhabria in San Francisco is scheduled to consider preliminary approval at an 18 May hearing. The bank is facing charges that its employees had opened fictitious accounts in part because of pressure to meet sales goals. John Stumpf and Carrie Tolstedt, who were respectively the bank’s chief executive and retail banking chief, lost their jobs and some 5,300 employees were fired. The $142 million settlement covers accounts opened since May 2002. Wells Fargo originally agreed to pay US$110mil covering accounts since 2009, but boosted the payout after discovering more problems.

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