The Blubber

(AML) and sanctions programs.

The company has not disclosed which government agency is investigating its practices or provided details about the specific issues under examination.

WFC revealed this inquiry into its AML and Sanctions program in its second-quarter Securities and Exchange Commission (SEC) filing. The same filing also noted that the bank is engaged in "resolution discussions" with the U.S. SEC regarding an investigation into the cash sweep options offered to new investment advisory clients. WFC added in its SEC filing that “There can be no assurance as to the outcome of these discussions.”

While such inquiries and investigations do not always result in penalties or enforcement actions, they remain significant concerns for the bank.

Typically, from late July to early August, the banking sector releases its second-quarter SEC filings. These filings often provide brief updates on the banks' expectations for the upcoming period. Changes in language from quarter to quarter offer investors insights into ongoing issues within the company.

Since September 2016, WFC has encountered considerable challenges, including various penalties and sanctions, such as an asset cap imposed by the Federal Reserve.

Recently, Wells Fargo faced a class action lawsuit alleging mismanagement of its employee health insurance plan, resulting in overpayments for prescription medications by thousands of U.S.-based employees. The lawsuit seeks statutory fines and unspecified damages on behalf of a nationwide class of WFC health plan participants and beneficiaries, potentially numbering in the tens of thousands.

In June 2024, WFC also faced a proposed class action lawsuit accusing the bank of involvement in a $300-million Ponzi scheme that defrauded over 1,000 investors, primarily senior citizens, of their substantial life savings. The lawsuit claims that Wells Fargo was aware of the fraudulent activities from 2011 to 2021 and provided significant assistance to the perpetrators while benefiting from the scam.