Later On

A blog written for those whose interests more or less match mine.

Wells Fargo Wants Claims Over Fake Accounts Decided Out of Court by Arbitrators that Wells Fargo Selects and Pays

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And, of course, corporations go to great lengths to keep the government away from corporate activities (see previous post for an example of why): they fight against having government regulations, government inspectors, or trials in government courts. Corporations prefer arbitration to court proceedings because in arbitration the corporation selects the arbitrator and pays him or her, and the corporation blacklists any arbitrator who finds against the corporation, so that in time they have a large stable of pro-corporate arbitrators who are willing to decide in favor of the corporation to ensure future business.

Laura Keller reports at Bloomberg:

Wells Fargo & Co. is trying to keep dozens of customers suing over bogus accounts opened by its employees out of court, saying they agreed to resolve any disputes in arbitration when they began doing business with the bank.

The lender also asked for the lawsuits, filed by 80 customers in federal court in Salt Lake City to be thrown out. Wells Fargo noted in a Nov. 23 filing that a separate judge has already ruled that arbitration agreements can be enforced in a similar class-action lawsuit in Northern California.

The San Francisco-based bank has faced a torrent of criticism and the ire of regulators after agreeing to pay $185 million in September to settle claims that employees opened potentially more than 2 million unauthorized accounts. It fired 5,300 workers over five years. John Stumpf resigned as chairman and chief executive officer in the wake of the scandal. Carrie Tolstedt, the executive in charge of the community banking unit, retired this year.

Three Utah customers sued in September shortly after the settlement was announced and blamed the scandal on the lender’s push to increase the number of accounts held by clients — a strategy called cross-selling designed to boost the number of accounts on which the bank could collect fees. Wells Fargo vowed to eliminate sales goals linked by regulators to cross-selling.

The plaintiffs in the Utah lawsuit seek to represent other customers in a class action and to recover at least $5 million in damages from the bank. They said the company also should have to pay punitive damages for its failure to alert customers to the abuses for more than a year after it was sued by the Los Angeles city attorney.

SEC Probe

The U.S. Securities and Exchange Commission, the Department of Justice, state attorneys general and prosecutors’ offices and congressional committees have started inquiries into the sales practices. . .

Continue reading.

Written by LeisureGuy

26 November 2016 at 10:32 am

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