Problems at Wells wealth unit; Equifax raises breach estimates
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More scrutiny for Wells: Wells Fargo, which just can’t seem to avoid trouble, has come under renewed scrutiny, this time in its wealth management business. The bank disclosed in a securities filing Thursday that, “in response to inquiries from federal government agencies,” the bank’s board is conducting an independent investigation into whether employees at its Wells Fargo Advisors unit made “inappropriate referrals or recommendations” to some of its customers. Wells also acknowledged in the filing that it had overcharged some wealth management customers. Wall Street Journal, Financial Times, American Banker here and here
Recount: Equifax increased the number of American consumers affected by last year’s data breach by 2.4 million, bringing the total to 147.9 million, up from 145.5 million reported previously. On a more positive note, the company said its earnings for the fourth quarter of last year jumped 40% to $172 million, helped by a U.S. income tax benefit and growth in international markets. But revenue fell at the U.S. division that works with banks and other lenders. Wall Street Journal, Washington Post
Another goof: MetLife, still reeling from a scandal in which it admitted it failed to pay pension benefits to more than 13,500 retirees it had assumed responsibility for, said it revised its 2017 earnings upward after discovering that it had over-reserved for a retirement savings product in Japan. While the mistake allowed the company to increase its previously reported 2017 net income by $264 million, MetLife said it “represents a material weakness in internal controls over financial reporting.” The Securities and Exchange Commission is also investigating the matter, the company disclosed. Wall Street Journal, Financial Times
Revived: A group led by former banker Maria Contreras-Sweet and backed by investor Ron Burkle said it reached a last-minute deal to acquire the assets of the embattled Weinstein Co. The deal had appeared to be dead just a few weeks ago. Contreras-Sweet, the former head of the Small Business Administration under President Obama, said her team will be launching “a new company, with a new board and a new vision that embodies the principles that we have stood by since we began this process last fall.” Wall Street Journal, New York Times
Wall Street Journal
Ready to go: The Senate is expected to vote early next week on a bill that would “relax dozens of rules for small to medium-size banks, shaking up the banking sector with policy changes that could encourage deal-making and make it easier for banks to expand.” The bill has support from both parties, the Trump administration and top Federal Reserve officials.
Circling back: President Trump is expected to nominate Richard Clarida, a managing director and global strategic adviser at Pacific Investment Management Co. and an economics professor at Columbia University, to be vice chair of the Federal Reserve Board. Clarida, who was described by the paper as “more of a pragmatist than an ideologue,” was assistant secretary of the Treasury for economic policy under George W. Bush from 2002 to 2003. He reportedly was Trump's favored candidate for the spot late in 2017, but reports in January said he would not be nominated.
“The optics are not good here. The public is left wondering if subsequent loans were the spoils of promises or impartiality that might be paid at some point down the road. This problem is the direct result of keeping one foot in the White House and the other foot in Wall Street.” — Scott Amey, general counsel at the Project on Government Oversight, about the propriety of loans made by several banks to the real estate firm headed by Jared Kushner, President Trump’s son-in-law and adviser, which have been called into question this week.