This Texas Investor Has a Serious Beef With Wells Fargo
This story has been updated with Wells Fargo’s response.
As if Wells Fargo didn’t already have enough problems.
After the bank’s fake accounts scandal led to a $185 million fine, lawsuits from shareholders and former employees, a Senate Banking Committee hearing where CEO John Stumpf was told by Sen. Elizabeth Warren (D-Mass.) that he exhibited “gutless leadership,” and a call for the bank to be broken up, it now has to face Lacy Harber, an 80-year-old businessman and philanthropist from Denison, Texas.
And Mr. Harber is definitely not happy.
On Thursday, Harber took out ads in four newspapers—the New York Times, San Francisco Chronicle, Charlotte Observer, and Dallas Morning News—to attack the San Francisco-based bank for what he sees as its history of unethical behavior, a history that begins with his own experience.
Headlines “GREED. DISHONESTY. BETRAYAL.” the ad reads, “I was a long-time customer of Wells Fargo Advisors. As one of their largest individual clients, Wells Fargo Advisors profited greatly from me, while I lost millions of dollars.”
According to the Dallas Morning News, Harber’s beef with Wells Fargo (WFC) began on Aug. 24, 2015. Believing that turbulence in the European markets that morning would create a buying opportunity on Wall Street, the millionaire investor—he owns Las Vegas real estate and various small banks and marinas, according to the New York Times—told his Wells Fargo broker to buy $34.8 million in stock in companies like Apple (AAPL), ExxonMobil (XOM), and Chevron (CVX).
A longtime client—Harber told the Morning News that he’d been a brokerage customer of Wells Fargo and its predecessors for 43 years—he bought the shares on margin, meaning that the bank loaned him most of the money.
But when the market tanked that day—the Dow Jones Industrial Average was off almost 1,100 points at one point—Harber told the Morning News that Wells Fargo informed him he had to deposit the $34.8 million by 3 p.m. When he could only come up with $19 million, Wells Fargo decided to liquidate his account, causing him to lose some $5.8 million, the Morning News reports. Adding insult to injury, Haber says he was charged $483,000 in brokerage fees to boot.
“In those 43 years, I did hundreds and hundreds of millions of dollars worth of trades. Not one time have I ever been one day late in meeting a margin call or covering a short or paying for stock,” Harber told the Morning News.
For its part, Wells Fargo says Harber was, in effect, a big boy who knew what he was doing.
“Mr. Harber is a highly sophisticated, experienced investor who routinely made his own investing decisions. We executed his transactions on a day of extraordinary market volatility that included a 1,000-point drop in the Dow Jones industrial average,” the bank said in a statement to Fortune. “Mr. Harber’s trades were done on margin. Unfortunately, his trading was affected by adverse market conditions. We’re in litigation with Mr. Harber and are strongly defending against his claims.”
And, the bank added, “Mr. Harber has chosen to use the current media focus on Wells Fargo as a means to draw attention to his own lawsuit.”
Harber is no stranger to lawsuits. When he and Wayne Newton—a.k.a. Mr Las Vegas—once got into a business spat, he sued and wound up with 80% of Newton’s Casa de Shenandoah property in Las Vegas, the Morning News reports. “If I got mad at Mike Tyson, I’d get right in the middle of him,” Harber told the paper. “I’d get the pooh pooh beat out of me, but I’d still get right in the middle of him.”