|Bid||45.16 x 1400|
|Ask||45.40 x 3100|
|Day's range||44.96 - 46.67|
|52-week range||43.34 - 54.75|
|Beta (5Y monthly)||1.11|
|PE ratio (TTM)||11.14|
|Earnings date||13 Apr 2020|
|Forward dividend & yield||2.04 (4.40%)|
|Ex-dividend date||05 Feb 2020|
|1y target est||50.70|
Wells Fargo has reached a $3 billion settlement with U.S. authorities, making it one more step closer to putting its notorious fake-account scandal behind it. The tarnished bank will make the payment to the U.S. Department of Justice and the Securities and Exchange Commission, U.S. officials announced on Friday, putting to rest one of the final major investigations into the bank's wrongdoing. In what is rare for a corporate settlement, Wells Fargo admitted that for 14 years it pressured employees to meet "unrealistic sales goals that led thousands of employees to provide millions of accounts or products to customers under false pretenses or without consent." It also admitted that employees forged records or misused customer data. As part of the agreement, prosecution will be deferred for three years and during that time Wells Fargo will cooperate with any ongoing government probes. Bank CEO Charles Scharf, who was brought in after the scandal, said in a statement that his bank is now committed to making sure nothing like this ever happens again. The scandal rocked the bank, which once had a stellar reputation, and sparked contentious hearings on Capitol Hill. And more hearings are scheduled. The House Financial Services Committee is already planning three more hearings on Wells Fargo's conduct for next month.
The Zacks Analyst Blog Highlights: Coca-Cola, Wells Fargo, U.S. Bancorp, TJX Companies and Southern
(Bloomberg) -- Harvey Weinstein was convicted of rape and a criminal sexual act, more than two years after allegations against the former Hollywood power broker sparked the MeToo movement.Weinstein faces a five- to 25-year sentence for the criminal sexual act and as long as four years on a third-degree rape count. He was acquitted of rape in the first degree and charges of predatory sexual assault that could have resulted in a life sentence.The 67-year-old movie producer, who is due to be sentenced on March 11 and plans to appeal, heard the verdict without expressing any emotion in an otherwise silent courtroom -- though he then turned to his lawyers and said, “But I’m innocent, I’m innocent, I’m innocent. How can this happen in America?” one of them said after court.He was led away in handcuffs by a pair of court officers, one holding each arm, his walker remaining behind in the courtroom. The judge ordered Weinstein to be sent to the infirmary at New York City’s Rikers Island jail. Lead prosecutor Joan Illuzzi and her colleague Meghan Hast exchanged a smile as they left the courtroom.The trial marked an extraordinary moment in a national reckoning over the abuse and assault of women in the workplace. Much has changed since the New York Times and the New Yorker reported in late 2017 that dozens of women had accused Weinstein of preying on them, unleashing similar claims against other powerful men.“This trial -- and the jury’s decision today -- marks a new era of justice, not just for the Silence Breakers, who spoke out at great personal risk, but for all survivors of harassment, abuse and assault at work,” Tina Tchen, chief executive officer of the Time’s Up Foundation, said in a statement.Since the allegations against Weinstein were first widely reported, some 1,400 powerful people have been publicly accused of harassment, abuse or assault, according to Temin, the crisis consultants. Many suffered professional consequences of one kind or another. The crisis consultancy Temin & Co. puts the current number of Weinstein accusers at 111.Manhattan District Attorney Cyrus Vance Jr. named the six accusers who testified -- Dawn Dunning, Miriam Haley, Jessica Mann, Annabella Sciorra, Tarale Wulff and Lauren Young -- and added prosecutors Illuzzi and Hast.“These are the eight women who changed the course of history in the fight against sexual violence,” Vance said in a statement. “These are eight women who pulled our justice system into the 21st century by declaring that rape is rape, and sexual assault is sexual assault, no matter what.”Read More: Weinstein Jury Stuck on Gravest Charge, Told to Keep TryingWeinstein’s lawyer Arthur Aidala said the defense would appeal the guilty verdicts and that he was “very confident” in the outcome. He called his client “a very strong man” who has remained “very calm” in the face of the verdict, and said he would ask an appeals court this week to order Weinstein’s release pending his sentencing.Aidala, who related Weinstein’s response to the verdicts, added, “I put my hand on him and I said, ‘Harvey, it’s gonna be OK.’”Lead defense lawyer Donna Rotunno had asked New York State Supreme Court Justice James Burke to let Weinstein remain free under house arrest. She said he was in the care of five doctors and needed to inject himself in the eye to avoid going blind. She noted that he’d been acquitted of the most serious charges. Burke told the lawyers he’d see them at the sentencing.The jury, made up of seven men and five women, deliberated for five days and last week suggested they might be deadlocked on two counts. As eight of them left the courthouse Monday, they ignored a throng of reporters scrambling to interview them and got into a New York state court van.Weinstein had been on trial in Manhattan since Jan. 6, charged with forcing oral sex on “Project Runway” assistant Haley in his SoHo loft in 2006 and raping aspiring actor Mann in a midtown Manhattan hotel in 2013. Prosecutors also called actor Sciorra, who says Weinstein raped her in the early 1990s, to support the predatory sexual assault charges, which require a serious assault on at least two people -- Haley and Sciorra, in this case, or Mann and Sciorra. Sciorra’s friend and professional colleague Rosie Perez testified that Sciorra told her about the attack at the time.Read More: Weinstein Was Jekyll and Hyde, Witness Tells JuryTo show a pattern of sexual activity without consent, prosecutors called three additional witnesses who allege Weinstein attacked them.The verdict appeared to reflect skepticism of Mann’s and Sciorra’s testimony. Weinstein’s lawyers pressed both Sciorra and Perez on the lack of specificity of their memories about an incident that allegedly happened more than 25 years ago. The defense cross-examined Mann for more than two days, suggesting she had continued to have sexual encounters with Weinstein after the alleged attack until late 2016 -- a behavior typical of victims, according to a forensic psychiatrist who testified for the prosecution.Weinstein’s lawyers invoked affectionate emails and sustained relationships with Weinstein long past the alleged attacks, to paint a picture of consensual sex with mutual benefits. It was the women who were using Weinstein, they told the jury.In the end, though, Weinstein’s lawyers couldn’t persuade the jury that the encounters with Haley and Mann were at worst transactional and that the woman is responsible for what happens to her -- a go-to defense in sexual assault trials that’s riskier in the MeToo era.Weinstein still faces sexual assault charges in Los Angeles. They were announced the day his New York trial started.MeToo advocates stress that the movement is about more than the Weinstein trial.“These really brave women have unleashed something that is bigger than anything we could have ever predicted,” said Fatima Goss Graves, the president and chief executive officer of the National Women’s Law Center.Read More: MeToo Moment Two Years in the MakingWorkplaces have bolstered their sexual harassment policies. Some of the biggest companies, including Alphabet Inc.’s Google and Wells Fargo & Co., have dropped forced-arbitration clauses for harassment complaints from employment contracts. More than a dozen states have amended or updated workplace harassment laws.But Weinstein’s conviction “should not be viewed as a statement for or against a movement,” said Laura Brevetti, a former federal prosecutor in Brooklyn who has defended clients accused of sex crimes.Instead, she said, it is “a clear vindication of the goal that so many have tried to achieve for decades -- that a person who has been sexually abused by anyone, especially someone in a position of power or authority, should not remain silent about it, that a victim has the right and channel to report it, and that our judicial system can ultimately bring justice to a victim.”The case is People v. Weinstein, 450293/2018, New York State Supreme Court (Manhattan).Read MoreAccusers Could Send Producer to Prison for LifeWeinstein Lawyer Mocks D.A.’s Case, Urges ‘Courage’ on JuryWeinstein Was a ‘Predator’ With ‘Insurance,’ Prosecutor Says‘I Think I Was Raped’: Jury Hears Rosie Perez Back Up SciorraAccuser Called Weinstein a ‘Soul Mate,’ Ex-Friend TestifiesJessica Mann Is Grilled on Contact After Alleged RapeWeinstein’s Dream Jury Is Conservative, Traditional, Skeptical(Updates with Weinstein’s remark in third paragraph and Vance’s in eighth and ninth paragraphs)\--With assistance from Olivia Rockeman, Olivia Raimonde, Chris Dolmetsch, Jeff Green and Rob Golum.To contact the reporters on this story: Patricia Hurtado in Federal Court in Manhattan at firstname.lastname@example.org;Rebecca Greenfield in New York at email@example.comTo contact the editors responsible for this story: David Glovin at firstname.lastname@example.org, Peter Jeffrey, Tina DavisFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- There was once a time, just two short years ago, before “Weinstein clauses” and “Weinstein taxes,” before “intimacy coordinators” and “disgrace insurance.”Before, in other words, the MeToo movement and its chief villain, Harvey Weinstein, tore through corridors of power and prompted a global reckoning for rich, powerful men. The guilty verdict handed down for Weinstein on Monday is yet another sign that the MeToo movement is bringing unprecedented changes to virtually every corner of business and political life.MeToo forced corporations to reconsider long-standing practices and transformed, in at least some ways, how men and women operate in the workplace, a process still evolving in fits and starts. As sex-harassment complaints spiked in the last two years and numerous prominent people were fired, companies also found new ways to protect themselves. Some merger agreements now include a “Weinstein Clause” in case misconduct emerges. Companies can even purchase a type of “disgrace insurance” against wayward executives. “This isn’t the beginning or the end,” said Fatima Goss Graves, the president and chief executive officer of the National Women’s Law Center. “That public conversation and transformation is much bigger than any one person — even someone who is as powerful as Harvey Weinstein.’’In numbers alone, the sheer volume of complaints that surfaced after the Weinstein revelations in 2017 was stunning. In a single year, Bloomberg’s own accounting found 425 public allegations of sex-related misbehavior among prominent people working across industries, including politics, media, technology and finance.And they continue to surface. The crisis consultancy Temin & Co. has identified 1,400 powerful people accused of misconduct in the last two years. Almost half of those surfaced in the last year alone, as the movement went global to places like India. Sex crimes and harassment claims to the Equal Employment Opportunity Commission climbed as well. Some 4,195 individuals have received legal assistance from the Time’s Up Legal Defense Fund in the last two years. The organization, created in the wake of the Weinstein allegations, has filed high-profile sexual-harassment lawsuits on behalf of low-wage workers against McDonald’s and Walmart. (Both companies have said they don’t tolerate harassment.)Many of the accused faced professional consequences — legislators resigned, chief executives were ousted. That was an uncommon fate for those accused of similar misdeeds before the Weinstein reporting, when such matters were often swept under the rug.The workplace also changed. More employees than ever are required to take mandatory sexual harassment training. Those programs also got a rethink, focusing more on “bystander training,” which teaches people to recognize inappropriate behavior among colleagues and either intervene or flag it. Research has found it leads to higher rates of reporting of inappropriate conduct.Scrutiny on Weinstein’s behavior was already reshaping Hollywood in particular. The industry has focused more intensely on diversifying, with institutions like the Academy of Motion Picture Arts and Sciences attempting to bring more women into leadership roles and initiatives such as the USC Annenberg Inclusion Initiative pushing studios to give women a greater voice in filmmaking.Additionally, new guidelines have already been passed that directly target the bad behavior that Weinstein practiced. The Screen Actors Guild-American Federation of Television and Radio Artists released a guide on the use of “intimacy coordinators” who help prevent abuse during nude and sex scenes. It also opposed meetings and auditions in hotel rooms and private residences. If a meeting has to take place in such “high-risk” locations, the union recommends its members bring a “support peer” to act as chaperone.At the same time, a new California “casting couch” law clarified that sexual-harassment law applies to producers and directors and their informal professional relationships.Many of the tools that Weinstein and others used to keep their behavior out of the public eye have come under attack. Some of the biggest U.S. corporations — including Facebook Inc., Alphabet Inc.’s Google, and, most recently, Wells Fargo & Co. — have ended forced arbitration for sexual harassment claims. The dispute-resolution process, which forces workers to resolve their complaints behind closed doors, can cover up misconduct from repeat offenders. The once commonplace nondisclosure agreement is now viewed as a way for individuals and corporations to buy silence for criminal or unsavory behavior. Around a dozen states have passed legislation banning their use for sexual harassment settlements (although most laws don’t fully invalidate them). In the wake of harassment allegations, NBC Universal agreed to release some former staffers from NDAs.Just last week, Conde Nast and Bloomberg LP both said they would stop using the agreements to settle harassment-related complaints. (Bloomberg’s change came after founder Mike Bloomberg was criticized in a Democratic presidential debate for their usage. He also said he would release three women from nondisclosure agreements with his company.) And when firms do pay out harassment-related settlements, the so-called “Weinstein Tax” prohibits individuals and companies from writing off the money, as a result of the 2017 tax bill. There's also some evidence that office norms have adapted to a new era. In a survey of 1,000 executives, a third said they’ve adjusted their behaviors since MeToo, such as watching their language and avoiding unwanted touching at work. At the very least, there’s an awareness that actions have consequences.Previously, executives nabbed generous exit packages after misconduct claims. Now, employment contracts make it clearer that harassment is cause for termination—without pay. CBS Corp. withheld $120 million in severance following allegations of CEO Les Moonves’s sexual misconduct. “MeToo is so far the most successful effort to change the ground rules,” said Louise Fitzgerald, an emeritus professor of psychology and gender and women’s studies at the University of Illinois at Urbana-Champaign. Not all the changes have been positive. Some men on Wall Street, and elsewhere, have decided it’s better to avoid women completely. This could lead to fewer opportunities for women in fields in which they’re already underrepresented and under-mentored. In surveys, female employees say they don’t think their own workplaces have changed since MeToo, and many say they still fear retaliation for reporting harassment. Some of the most prominent accused are making professional comebacks. Indeed, some organizations have made moves more self-protective than introspective. The Weinstein Clause has become a fixture of merger agreements on Wall Street. If an accusation of harassment surfaces after purchase, the buyer can recoup some of the costs, the clause says. Companies can also purchase disgrace insurance to limit damages from incidents like the kind that cost Imperative Entertainment LLC $10 million in 2017 after Kevin Spacey became embroiled in a sex scandal. The production company had to pay to reshoot “All the Money in the World” with a new lead actor. SpottedRisk, a Boston-based insurer, now offers policies for such events marketed at movie studios, brand advertisers, sports leagues and music labels — with limits starting at $10 million. A conviction, if anything, confirms the need for these changes, and more. “Here is the biggest MeToo offender of them all and he is going to spend possibly the rest of his life in prison,” said Stuart P. Green, a criminal law professor who studies sexual misconduct. That “couldn’t help but have the effect of confirming some of the validity of the MeToo movement.”\--With assistance from Jeff Green, Kelly Gilblom and Christopher Palmeri.To contact the author of this story: Rebecca Greenfield in New York at email@example.comTo contact the editor responsible for this story: Larry Reibstein at firstname.lastname@example.org, Nick TurnerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Harvey Weinstein was convicted of rape and a criminal sexual act in New York, more than two years after allegations against the Hollywood power broker sparked the MeToo movement.Weinstein, 67, could spend years in prison, a remarkable fall for a man once celebrated and feared in the film industry. The former movie mogul was acquitted of the most serious charge, predatory sexual assault, and a count of rape in the first degree.The trial marked an extraordinary moment in a national reckoning over the abuse and assault of women in the workplace. Much has changed since the New York Times and the New Yorker reported in late 2017 that dozens of women had accused Weinstein of preying on them, unleashing similar claims against other powerful men. The crisis consultancy Temin & Co. puts the current number of Weinstein accusers at 111.The verdict is “a strong message sent to survivors about the prospects of justice,” said Deborah Tuerkheimer, who prosecuted sex crimes and domestic violence cases in the Manhattan district attorney’s office, which handled the Weinstein case.It could encourage more victims of sexual assault to pursue that justice in the courtroom. Rape is notoriously underreported, partly because victims fear they won’t be believed and will be retraumatized.But Weinstein’s conviction “should not be viewed as a statement for or against a movement,” said Laura Brevetti, a former federal prosecutor in Brooklyn who has defended clients accused of sex crimes. Instead, she said, it is “a clear vindication of the goal that so many have tried to achieve for decades -- that a person who has been sexually abused by anyone, especially someone in a position of power or authority, should not remain silent about it, that a victim has the right and channel to report it, and that our judicial system can ultimately bring justice to a victim.”Read More: Weinstein Lawyer Mocks D.A.’s Case, Urges ‘Courage’ on JuryWeinstein, who never took the witness stand himself, had been on trial in Manhattan since Jan. 6, charged with forcing oral sex on “Project Runway” assistant Miriam Haley in his SoHo loft in 2006 and raping aspiring actor Jessica Mann in a midtown Manhattan hotel in 2013. Prosecutors for Manhattan District Attorney Cyrus Vance Jr. called several additional witnesses to establish a pattern of predation, including the actor Annabella Sciorra, whose searing account of an assault in her Gramercy Park apartment a quarter century ago was among the trial’s unforgettable moments.Weinstein’s lawyers came back at them by poking holes in their witnesses’ testimony, invoking affectionate emails and sustained relationships with Weinstein long past the alleged attacks, to paint a picture of consensual sex with mutual benefits. It was the women who were using Weinstein, they told the jury.In the end, Weinstein’s attorney Donna Rotunno and her team couldn’t persuade the jury of seven men and five women that the encounters with Haley and Mann were at worst transactional and that the woman is responsible for what happens to her -- a go-to defense in sexual assault trials that’s riskier in the MeToo era.Lead prosecutor Joan Illuzzi and her colleague Meghan Hast prevailed by arguing that Weinstein was a serial predator who lured victims, hungry for success and vulnerable, into his orbit with promises of mentorship or career-making roles and subjected them to a series of “tests” to see how much he could get away with.Weinstein still faces sexual assault charges in Los Angeles. They were announced the day his New York trial started.Read More: Weinstein Was a ‘Predator’ With ‘Insurance,’ Prosecutor SaysMeToo advocates stress that the movement is about more than the Weinstein trial.“These really brave women have unleashed something that is bigger than anything we could have ever predicted,” said Fatima Goss Graves, the president and chief executive officer of the National Women’s Law Center.Since the allegations against Weinstein were first widely reported, some 1,400 powerful people have been publicly accused of harassment, abuse or assault, according to Temin, the crisis consultants. Many suffered professional consequences of one kind or another. Workplaces have bolstered their sexual harassment policies. Some of the biggest companies, including Alphabet Inc.’s Google and Wells Fargo & Co., have dropped forced-arbitration clauses for harassment complaints from employment contracts. More than a dozen states have amended or updated workplace harassment laws.“That public conversation and transformation is much bigger than any one person, even someone who is as powerful as Harvey Weinstein,” Goss Graves said.The case against Weinstein hinged on whether the panel believed Mann and Haley, who went years without reporting the alleged attacks. Weinstein’s lawyers suggested through questioning that the women had “re-labeled” consensual encounters as assaults long after the fact, in the wake of the news reports that set off MeToo. They pointed to evidence that Mann may have continued to have sexual encounters with Weinstein into late 2016, more than three years after the alleged rape -- a behavior typical of victims, according to a forensic psychiatrist who testified for the prosecution.“Sopranos” star Sciorra was the first accuser to take the stand, testifying that she weighed a little over a hundred pounds in the 1990s and Weinstein well over 200. She told the jurors that he pushed his way into her apartment one night in the winter of 1993-94 and overpowered her, pinning her hands above her head and raping her. When she confronted him a month later, she told the panel, he scoffed at the idea that the encounter wasn’t consensual.“That’s what all the nice Catholic girls say,” Sciorra said he told her. She testified that he then warned her never to discuss the incident.“His eyes went black,” Sciorra said, “and I thought he was going to hit me right there.”The case is People v. Weinstein, 450293/2018, New York State Supreme Court (Manhattan).Read MoreWeinstein Was Jekyll, Hyde, Then Rapist, Witness Tells Jury‘I Think I Was Raped’: Jury Hears Rosie Perez Back Up SciorraAccuser Called Weinstein a ‘Soul Mate,’ Ex-Friend TestifiesJessica Mann Is Grilled on Contact After Alleged RapeWeinstein’s Dream Jury Is Conservative, Traditional, SkepticalA MeToo Moment Two Years in the Making\--With assistance from Chris Dolmetsch, Jeff Green, Olivia Rockeman and Olivia Raimonde.To contact the reporters on this story: Patricia Hurtado in Federal Court in Manhattan at email@example.com;Rebecca Greenfield in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Glovin at email@example.com, Peter Jeffrey, Tina DavisFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Warren Buffett said he’s not yet picked a candidate in the U.S. presidential race.“I think I’m going to wait and see who gets the nomination,” Buffett said Monday in an interview with CNBC. “Normally, I vote for Democrats. We will see what happens.”Buffett, who runs Berkshire Hathaway Inc., endorsed Hillary Clinton for the 2016 election against now-President Donald Trump, and attended fundraisers for both Clinton and Barack Obama ahead of the 2008 primaries. The son of a Republican U.S. congressman, Buffett, 89, said he’s a capitalist, not a “card-carrying” Democrat.Democratic candidates vying for the nomination include Vermont Senator Bernie Sanders, who’s gained momentum with victories in Nevada and the New Hampshire primary. While Buffett agrees with Sanders that the country needs to do more for people who are left behind, he doesn’t think that requires dismantling “the golden goose” of capitalism.“I actually agree with him in terms of certain things he would like to accomplish,” Buffett said. “I don’t agree with him in many ways.”Buffett said he would prefer former New York City Mayor Michael Bloomberg over Sanders, who embraces what he calls democratic socialism.“I would certainly vote for him,” Buffett said of Bloomberg. “I don’t think another billionaire supporting him would be the best thing to announce.”Bloomberg’s campaign has said he would sell his company, Bloomberg LP, if he’s elected president. Buffett said he wouldn’t be a buyer because some other bidder is likely to emerge that would pay more. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)Buffett’s business partner, Charles Munger, said earlier this month that Michael Bloomberg could garner the votes of many moderates, increasing his chances in the election. Munger, a lifelong Republican, declined to name which candidate, if any, he was supporting. Buffett expressed support for Bloomberg in early 2019, ahead of the candidate’s official entry into the race.U.S. equities dropped Monday as the coronavirus continued to spread beyond China. Buffett said the virus hasn’t affected his long-term outlook on stocks, since he often views investing through a multi-decade lens.“It is scary stuff,” Buffett said. “I don’t think it should affect what you do in stocks. But in terms of the human race, it’s scary stuff.”Buffett spoke after releasing his annual letter and fourth-quarter earnings on Saturday. He said in the letter that shareholders can expect to hear more from top lieutenants Ajit Jain and Greg Abel, seen as the top contenders to eventually replace him as CEO. The company’s earnings report showed Berkshire stepped up its share repurchases at the end of 2019, spending $2.2 billion for the biggest tally ever in a single quarter.Berkshire’s Class A shares fell 2.5% to $335,027 at 11:09 a.m. in New York. They’re down 1.4% for the year.Here are some other key takeaways from Buffett’s comments Monday:On GeicoLast year, Berkshire announced that Todd Combs, one of Buffett’s key investing deputies, would take over as Geico’s chief executive officer. That change is temporary, Buffett said Monday.“Todd is there and I hope very much that he’s not there very long,” Buffett said. “Our intention always is to promote from within. We would hope to pick out the right person at Geico.”On Yield HuntBuffett criticized companies willing to take on more risk in the hunt for higher returns.“Reaching for yield is really stupid, but it’s very human,” he said.On AirlinesBuffett, whose company owns stakes in Delta Air Lines Inc. and Southwest Airlines Co., said it’s “very unlikely” Berkshire would buy an airline outright because of the heavily-regulated nature of the industry.On CryptoBuffett’s lunch with Chinese cryptocurrency entrepreneur Justin Sun doesn’t seem to have changed his mind on the asset.“Cryptocurrencies basically have no value -- they don’t produce anything,” Buffett said.On PG&EThe billionaire investor’s company owns a sprawling energy empire across the U.S. and even in the U.K. Still, he doesn’t seem to want to add PG&E Corp. to the mix, despite urging from California Governor Gavin Newsom.PG&E filed for Chapter 11 bankruptcy protection more than a year ago after its equipment was blamed for causing some of the worst fires in California history, resulting in about $30 billion in liabilities.“It’s too tough,” Buffett said, while praising Newsom. “I don’t know how to solve all that.”On Wells FargoBerkshire sold some of its Wells Fargo & Co. stake in the fourth quarter, taking that investment down to $17 billion at the end of the year. Buffett declined to give his current views on the company and reiterated that the bank made a mistake in not responding to its issues more quickly.“Some of it was sold down to avoid being over 10%,” Buffett said of the Wells Fargo stake, referring to U.S. regulations governing maximum bank ownership stakes. “We’ve sold more than that.”On Kraft HeinzBuffett said the company is “still a great business” even after struggles including a major writedown last year.Berkshire continues to carry the investment at $13.8 billion on its balance sheet, even though its market value was $10.5 billion at the end of 2019.(Updates with comments on coronavirus starting in 10th paragraph.)To contact the reporter on this story: Katherine Chiglinsky in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Though the settlement of fake account litigation will help Wells Fargo (WFC) overcome a major hurdle, several other ongoing probes remain a drag on its financials.
(Bloomberg) -- Wells Fargo & Co. will pay $3 billion to settle U.S. investigations into more than a decade of widespread consumer abuses under a deal that lets the scandal-ridden bank avoid criminal charges.The deferred-prosecution agreement with the Department of Justice spares the company a potential conviction that can create serious complications for banks, if it cooperates with continuing probes and abides by other conditions for three years. The accord also resolves a complaint by the Securities and Exchange Commission.Investigators found Wells Fargo’s overly aggressive sales targets led thousands of employees to open millions of bogus accounts for customers and foist other products on them from 2002 to 2016, often by creating false records or misappropriating their identities, the Justice Department said Friday. That generated millions of dollars in fees and interest and in some cases damaged customers’ credit ratings.“Our settlement with Wells Fargo, and the $3 billion criminal monetary penalty imposed on the bank, go far beyond ‘the cost of doing business,’” U.S. Attorney Andrew Murray for the Western District of North Carolina said in a statement. “They are appropriate given the staggering size, scope and duration of Wells Fargo’s illicit conduct.”The settlement is the bank’s largest yet from a series of scandals that claimed two chief executive officers. But for shareholders it’s in line with the more-than $3 billion the bank set aside for legal matters in the latter half of 2019 as negotiations progressed. It marks another step in efforts by CEO Charlie Scharf, who took over in October, to turn around the San Francisco-based lender as he conducts a review of all operations. The shares climbed about 1% in extended trading after the accord was announced.“The conduct at the core of today’s settlements -- and the past culture that gave rise to it -- are reprehensible and wholly inconsistent with the values on which Wells Fargo was built,” Scharf said in a statement Friday, outlining steps the bank has taken to reform over the past three years.Still, it’s hardly the end of the legal woes. The firm remains under a growth cap imposed by the Federal Reserve. The Office of the Comptroller of the Currency announced civil charges last month against eight former senior executives, some of whom settled. Probes into allegations at other businesses are continuing.And on Friday, House Financial Services Committee Chairwoman Maxine Waters announced she plans to have Scharf and Wells Fargo Chair Elizabeth Duke testify during a trio of hearings on the bank next month. Waters called the latest penalty disappointing, saying it “barely dents” the company’s profits from the period and is dwarfed by tax breaks the firm has since received under President Donald Trump’s administration.“Despite today’s settlement, these hearings and the committee’s investigation will make clear that the problems at Wells Fargo remain unresolved,” the California Democrat said.Scandals in Wells Fargo’s consumer operations erupted in 2016 with the revelation that employees may have opened millions of fake accounts to meet sales goals. The company’s expenses surged as new details emerged and as additional lapses and wrongdoing surfaced across business lines including mortgages and auto lending.The company’s stock has suffered ever since, closing on Friday just below the level it was at when the problems emerged more than three years ago.While the sales abuses have been described repeatedly in earlier probes, Friday’s settlement provides yet more details on the high-pressure environment that led legions of low-level employees to break the law -- often costing them their jobs when they were caught by the firm’s internal controls. Many inside the bank referred to abusive sales practices as “gaming,” according to prosecutors.That often included misappropriating customers’ identities to open checking and savings accounts, issue debit or credit cards, or enroll people in bill-pay or remittance services, prosecutors said. Employees sometimes forged client signatures, created PIN numbers to activate cards and moved money to simulate account funding. Some staff even altered contact information to prevent customers of learning about their unauthorized accounts or receiving satisfaction surveys.Senior managers were aware of the issues as early as 2002, with one internal investigator describing it as a “growing plague” two years later, and another remarking that it was “spiraling out of control,” investigators found. Yet senior leaders in the community banking division refused to alter their sales model or ratchet down unrealistic targets. They later minimized the problems to higher-ups and the board, blaming them on rogue employees, prosecutors said.The deal includes a $500 million payment to the SEC, which granted the bank a waiver to continue private placements of securities to accredited investors such as hedge funds. The settlement doesn’t resolve any criminal or civil liability for individuals, according to a senior Justice Department official.“This resolution is with respect to the bank only,” U.S. Attorney Nick Hanna told journalists in Los Angeles. “The investigation is ongoing.”The Justice Department said it considered Wells Fargo’s cooperation and prior settlements when deferring prosecution. The bank previously paid more than $1 billion to federal regulators for consumer mistreatment, $575 million to 50 states and the District of Columbia and $480 million for an investor class-action lawsuit.(Updates to add that CEO and chair will testify at congressional hearing in ninth paragraph)\--With assistance from Edvard Pettersson, Steve Dickson and Josh Friedman.To contact the reporters on this story: Hannah Levitt in New York at firstname.lastname@example.org;Tom Schoenberg in Washington at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, ;Jeffrey D Grocott at email@example.com, David Scheer, Joe SchneiderFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Wells Fargo Reaches Settlements to Resolve Outstanding DOJ and SEC Investigations Related to Historical Community Bank Sales Practices
Though the settlement of fake account litigation will help Wells Fargo (WFC) overcome a major hurdle, several other ongoing probes will continue to weigh on its financials.
Wells Fargo has agreed to pay $3bn in criminal and civil penalties for fraudulently opening millions of customer accounts in a scandal that federal authorities said reflected a “complete failure of leadership” at the US bank. The $3bn settlement with the Department of Justice and Securities and Exchange Commission is a significant step forward for the bank, which is under new management.
(Bloomberg) -- Wells Fargo & Co. is poised to pay roughly $3 billion to settle federal investigations into a range of consumer abuses that were rampant at the bank for years, according to a person with direct knowledge of the matter.The Department of Justice and Securities and Exchange Commission may announce penalties as early as Friday, the person said, asking not to be identified because talks are confidential. The company isn’t expected to plead guilty to a crime, the person said.Spokespeople for the company and Justice Department declined to comment. A spokeswoman for the SEC didn’t immediately respond to a message seeking comment.The long-anticipated settlement would mark the largest yet from a series of scandals that claimed two chief executive officers and fueled billions of dollars in operating losses tied to legal costs. The San Francisco-based bank already set aside more than $3 billion for legal matters in the latter half of 2019. The New York Times reported earlier Thursday that a settlement may be imminent.The accords are another step in efforts by CEO Charlie Scharf, who took over in October, to turn around the lender as he conducts a review of all operations. Still, the firm remains under a growth cap imposed by the Federal Reserve. And last month the Office of the Comptroller of the Currency announced civil charges against eight former senior executives, some of whom settled.The scandals erupted in 2016, when the bank conceded that employees may have opened millions of fake accounts to meet sales goals. The company’s expenses surged as additional lapses and wrongdoing surfaced across business lines including mortgages and auto lending.They’ve long taken a toll on Wells Fargo’s reputation and stock. The shares are down 12% this year, putting the price below where it was when regulators first described the abuses more than three years ago.Among other settlements, Wells Fargo has already paid more than $1 billion to federal regulators for consumer mistreatment, $575 million to 50 states and the District of Columbia and $480 million for an investor class-action lawsuit.(Updates with stock performance in penultimate paragraph)\--With assistance from Tom Schoenberg.To contact the reporter on this story: Hannah Levitt in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Dan Reichl, David ScheerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Analysts say the Morgan Stanley and E-Trade tie-up is a matter of survival in a brokerage industry crushed by technology-driven trends in retail investing.
(Bloomberg) -- In Silicon Valley, entrepreneurs and venture capitalists are making big bets that the future of banking is digital, doesn’t have fees, offers a high savings rate—and might not technically be a bank at all.Chime Inc. is part of a fast-growing class of well-funded financial technology startups offering debit cards, checking accounts and other financial services. And despite not having a banking license, Chime operates enough like a regular bank that Chief Executive Offer Chris Britt, 46, says it’s stealing away customers from companies like Wells Fargo & Co. and JPMorgan Chase & Co. by the millions.Today, Chime has 8 million accounts, the company said, about half of which use the company for direct deposits. That’s still small compared to the biggest banks, but it’s Chime’s growth that’s catching investors’ attention. In 2018, the company had only about 1 million people signed up. “The majority of our members are coming from the big banks,” Britt said.On Wednesday, in a bid to keep up that momentum, Chime plans to announce a new 1.6% interest rate on savings accounts, which compares with most large bank’s rates of well under 1%. Chime had not previously offered interest on savings products, and will partner with existing licensed banks to offer Federal Deposit Insurance Corp. coverage. The offering is the latest in a series of moves Chime is making to broaden its appeal to even more users, including a product that allows overdrafts of up to $100 without penalty, and a multi-year advertising deal with the Dallas Mavericks. Britt says that he is not looking at the new offering as a revenue opportunity, but as a way to bring in new customers. Chime has a reported valuation of $5.8 billion, which makes it one of the 25 largest startups in the U.S., according to research firm CB Insights. But it's one of many companies looking to bring new technology to the banking industry. Globally, digital banks—sometimes also called challenger banks, or neobanks—raised more than $3.7 billion in 96 separate deals in 2019, according to a report from CB Insights released on Wednesday, marking a record-breaking year in terms of both funding and the number of deals.That uptick in funding has followed rapid user growth. Financial technology startups that first launched with checking accounts or credit cards now have more than 54 million accounts all together, the report said.Of course, startups have hit some bumps in the road as many rush to add banking services. Most new digital banks don’t yet turn a profit. That includes Chime, the CEO recently said. Robinhood Markets Inc. ran into regulatory hurdles when it launched a checking-like service in late 2018 without securing deposit insurance (it has since debuted a similar product after partnering with an existing licensed bank). And Chime experienced widespread outages last fall that rendered its website and debit cards inoperable, stranding some customers. “The opportunity is obviously there,” said Conor Witt, a fintech analyst at CB Insights, adding that the savings product could boost customers’ trust. Eventually, “the goal is still to build a standalone challenger bank that becomes a mainstream bank over the course of time,” said Satya Patel, a partner at Homebrew and one of Chime’s first investors.If you’ve seen an ad for Chime on TV, it was likely talking about one of its most popular features: getting your paycheck two days early. In order to use this feature, as well as a few others, users have to set up their paychecks for direct deposit into their Chime accounts, something about about half of its members opt to do. Britt said that’s a key element of the company’s business model, which does not charge monthly fees and generates revenue primarily through interchange fees on debit cards and other transactions. “Once a user signs up for direct deposit,” Britt said, “engagement is off the charts.”While the industry is growing rapidly, there are still risks ahead for rising digital banks. After a certain point, investors worry, growth could become trickier, particularly as competition increases and each additional user gets more expensive to win over. And as some people feel less tied to a single bank, they could become harder to reach with multiple products—for example, a user might choose Chime for a checking account, Robinhood for a brokerage account and Chase for credit cards—undermining financial institutions’ attempts to cross-sell. At Chime, Britt wants to transform the company from an upstart into an “iconic, nationally known brand.” That will mean big sustained growth and even more product announcements in the future. “I think this next chapter for us is going to be a lot about expanding our voice and raising awareness of the brand more broadly in the population,” Britt said, brushing aside competitive fears: “It’s a big market.”(Updates fourth paragraph with Britt’s comment that Chime’s new product is focused on bringing in new customers, not increasing revenue. A previous version corrected Britt’s age. )To contact the author of this story: Julie Verhage in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Anne VanderMey at email@example.com, Mark MilianFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Restructuring efforts and use of technology to enhance revenues have been the main themes for banks over the last five trading days amid concerns related to impact of Covid-19 virus globally.
Wells Fargo & Company (NYSE: WFC) said today that Chief Financial Officer John Shrewsberry will present at the Credit Suisse 21st Annual Financial Services Forum in Key Biscayne, Florida, on Thursday, February 27, 2020, at 8:40 a.m. ET (5:40 a.m. PT).