Is it time to dump Wells Fargo stock before things go from bad to worse with the banking giant? According to CNBC it is time to sell Wells Fargo stock.
Wells Fargo has displayed behavior that is “beyond outrageous” and investors should dump the stock, according to banking analyst Dick Bove.
A day after news broke that the second-largest bank in the U.S. by assets paid a $185 million fine for what regulators called “widespread illegal” sales practices, Bove ripped the company and gave it the only sell rating in his entire 35-bank coverage universe.
The bank is hunkering down and lawyering up so it admits no wrong doing despite having fired more than 5,000 employees who tampered with client accounts.
Authorities accuse Wells Fargo of creating accounts for customers across multiple product lines without telling them. Employees would, for instance, issue ATM cards, falsely tell customers that certain products had to be bought in tandem with others, and conduct a number of other schemes to boost their sales numbers, according to allegations.
It was all part of a high-pressure sales culture and ultimately, according to the company, would result in the firing of some 5,300 workers at multiple levels.
Mr. Bove suggests that Wells Fargo need to do something big, dramatic and right in order not to lose the bulk of its customers, like forgive all student debt! In the meantime if you own any it may still be time to dump Wells Fargo Stock.
Is This the Tip of the Iceberg?
Considering the magnitude of this problem it is difficult to imagine how bad oversight was a Wells Fargo. And, if something this glaring was going on, what else is wrong at the banking giant? Amazingly the person who oversaw the division where this went on has retired with praise from the company and did not have to pay back anything to the bank or customers for their losses. Fortune describes how Carrie Tolstad was referred to as a standard bearer for the bank.
Wells Fargo & Co’s WFC -0.37% “sandbagger”-in-chief is leaving the giant bank with an enormous pay day-$124.6 million.
In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts-a seemingly routine practice that employees internally referred to as “sandbagging”-to give back any of her nine-figure pay.
This is going back on a promise that the big banks made after the financial crisis that wrongdoers would not get huge paydays in return for conduct that harmed customers.
Wells Fargo Stock
WFC stock peaked at just under $58 a share in mid-2015 and has slid to the $50 range. Surprisingly the news of misdoing only took the stock down to $48 and it has come back a bit. However, Democratic senators are calling for a banking committee investigation. Our concern is that there is more to the story of mismanagement and more bad news to come. Thus it is time to Dump Wells Fargo stock at least until the dust clears and maybe forever.
