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California Is Considering Criminal Charges Against Wells Fargo

October 19, 2016, 9:48 PM UTC
A Wells Fargo Bank Branch Ahead Of Earnings Figures
Craig Warga — Bloomberg via Getty Images

Even after the resignation of CEO John Stumpf, the Wells Fargo phony account scandal seems far from over.

The California Attorney General’s Office has launched a criminal investigation into Wells Fargo (WFC) over allegations it opened millions of unauthorized customer accounts and credit cards, according to a seizure warrant seen by Reuters.

The Los Angeles Times, which said it obtained the warrant with a Freedom of Information Act request, has posted the document here.

In it, Attorney General Kamala Harris says she authorized a seizure warrant against the bank seeking customer records and other documents. Harris said there is probable cause to believe the bank committed felonies. It is very rare for banks and financial firms to be charged with criminal conduct. Some have worried that a criminal indictment, because of debt covenants, could put a bank out of business.

Last week, Wells Fargo reported that the scandal appears to be having some affect on its ability to attract new customers. The bank said that checking account applications were down 25% in September. Credit Card applications dropped by 20%.

Meanwhile, this week, Stumpf, Wells Fargo’s former CEO, also resigned from the boards of Chevron and Target.