Wells Fargo in Crosshairs of Next Legal Drama

401(K) 2013

Wells Fargo in Crosshairs of Next Legal Drama (Bloomberg)

The nation’s largest mortgage lender, Wells Fargo, has been under scrutiny by U.S. government attorneys for more than a year now regarding the company’s role in mortgage bond sales. Last year, President Obama set up a task force to determine whether banks like Wells Fargo broke the law while underwriting and then selling mortgage bonds. Should the San Francisco-based bank be found to have violated the Financial Institution Reform and Recovery Act (FIRREA), it could be sued for fraud by the U.S. government. Other banks being investigated include Bank of America, Credit Suisse Group AG and JPMorgan Chase & Co. Should any or all of these financial Goliaths be found guilty under FIRREA, the penalties and fines could make JPMorgan’s current $13.2 billion plea look like spare change. At that point, does anyone want to hold shares of these companies?

Wayne Ellis

Wayne Ellis has been involved in the financial publishing industry for more than 15 years. During that time, he has helped to edit, to market and to launch products and services for Ernst & Young, LLC, Fidelity Investments, Agora, LLC, and Eagle Financial Publications. He currently puts his broad-based experience and industry expertise to use as a contributing writer for Eagle Financial Publications. He also is a graduate of Arizona State University.