Wells Fargo has reportedly caused billions of dollars in damage to its customers, but has it been overshadowed by the FTX blowup story?
FTX’s spectacular bankruptcy deserves all the attention it has garnered so far. The heads of the once-high-flying company were allegedly involved behind the scenes in shady business dealings with client funds.
Sam Bankman-Fried, the 30-year-old founder of the bankrupt crypto exchange, was extradited on suspicion of committing “one of the largest financial frauds in US history.” Meanwhile, two of his former colleagues – Gary Wang and Caroline Ellison of Alameda – have pleaded guilty to various fraud charges.
Even after more than a month of the unraveling, FTX dominated the newsfeed of both crypto and traditional media outlets. But there are equally or more damaging activities that have been carried out by well-known financial well-known companies that demand similar, if not more, attention.
Did FTX Overshadow Well Fargo’s Fraudulent Practices?
“Wells Fargo’s rinse and repeat cycle in violation of the law have harmed millions of American families.” This is what the director of the Consumer Financial Protection Bureau, Rohit Chopra, said about the whole event. But the “world” may have taken more notice of the damage caused by FTX, while the multibillion-dollar scandals of traditional giants like Wells Fargo don’t get the attention they need.
Echoing a similar sentiment, Ripple CEO Brad Garlinghouse attached an FTX-related meme and tweeted, ”The world is (appropriately) outraged by SBF and FTX fraud, but when Wells Fargo also mismanages billions in client funds, it barely appears on the radar. To reflect….”
Some XRP enthusiasts even blamed the SEC for its inability to go after companies like FTX (which established itself as a political mega-donor) and Wells Fargo to protect clients from losing billions and instead pick easy targets like the firm. of blockchain Ripple.
The Wells Fargo scandal
For the uninitiated, Wells Fargo was fined $1.7 billion by the Consumer Financial Protection Bureau in the largest civil penalty imposed by the agency, and another $2 billion for its role in mismanaging consumer loans for more than 16 million customers.
The CFPB Director called the country’s fourth-largest bank a “repeat offender” and was said to have caused billions of dollars in damage to its clients, including the loss of vehicles and homes for thousands of them. The bank was also accused of fraudulently applying fees and interest to car loans and mortgages, having “improperly repossessed” cars and misapplying customer payments to car loans and mortgages.
Wells Fargo even went so far as to oppose mortgage modifications that the regulator believed should have been approved. The refusal led to some borrowers losing their homes, an issue the bank was reportedly aware of before addressing it years later, the CFPB said in a statement.
From overdraft kickbacks and other erroneous charges to checking and savings customers to the improper freezing of accounts, Wells Fargo had caused serious damage.
