NEW YORK (Reuters) – Massachusetts Secretary of the Commonwealth William Galvin said Thursday his office is investigating possible customer abuses by employees of Wells Fargo & Co’s brokerage division.
Galvin’s investigation comes a week after Wells Fargo announced its own internal review into whether employees at its brokerage, Wells Fargo Advisors, recommended unsuitable investments or made inappropriate referrals or recommendations related to advisory accounts or 401(k) roll-overs.
Wells Fargo Advisors spokeswoman Shea Leordeanu said in an emailed statement that the firm has made “significant progress in our work to identify and fix any issues, make things right and build a better, stronger company.”
The third-largest U.S. bank also said it is reviewing whether clients were overcharged for certain fiduciary and custody accounts in a part of the wealth management business that handles trusts, according to its annual 10-K U.S. Securities and Exchange Commission filing.
Wells Fargo’s internal review was prompted by requests from federal regulators, and the Massachusetts state secretary said his office is asking for information about the scope of the investigation.
The bank has been dogged by scandal since September 2016 when it reached a $190 million settlement with the federal and state regulators related to the opening of 3.5 million accounts for customers without their permission by Wells Fargo employees seeking to hit sales targets.
“Wells Fargo’s recent banking scandal, which involved opening bogus accounts for their customers, leads me to believe that where there is smoke, there’s fire,” Galvin said in a statement. “I need to be assured that Massachusetts residents haven’t been burned by corporate greed.”
Reporting By Elizabeth Dilts; Editing by Cynthia Osterman