Wells Fargo's legal bills are likely to rise as the bank continues to deal with the fallout of a phony-sales scandal and a raft of other lawsuits and investigations.

The San Francisco-based bank disclosed Wednesday that as of Dec. 31, 2016, it could exceed its estimate for litigation losses by as much as $1.8 billion. That number was up from $1.7 billion at the end of September 2016 — shortly after the scandal first came to light — and up from $1.3 billion a year earlier.

Wells Fargo is facing an onslaught of inquiries, investigations and lawsuits in the wake of the revelation that the company's employees may have opened as many as 2 million unauthorized customer accounts.

The government entities that are looking into the matter include the Department of Justice, the Securities and Exchange Commission, the Department of Labor, congressional committees and state attorneys general.

Outside a Wells Fargo branch.
The CFPB's public database shows that 3,990 complaints were filed against Wells Fargo between September and November, or 74% more than were filed in June, July and August. Bloomberg News

In addition, lawsuits have been filed on behalf of customers, former Wells employees and investors, the company said in its annual report filed with the SEC.

Separately, the $1.9 trillion-asset bank disclosed Wednesday that it has identified an issue involving foreign banks that were using Wells-based software to conduct trade-related transactions in violation of U.S. sanctions. Wells said that it disclosed its findings to the Treasury Department's Office of Foreign Assets Control and is cooperating with a Justice Department inquiry.

Wells also faces litigation related to ATM fees, interchange fees, overdraft fees and its role as a trustee for a number of residential mortgage-backed securities. Furthermore, the Justice Department and other agencies are also continuing to probe certain mortgage-related practices at Wells.

Meanwhile, the sales-related scandal, which led to the ouster of longtime CEO John Stumpf, is taking a financial toll in ways that go beyond the company's potential litigation liability.

Wells CFO John Shrewsberry said last month that the company's legal costs and other expenses related to the scandal will run at $50 million to $60 million per quarter for the next several quarters. New checking accounts at Wells have been down by at least 30% for four consecutive months when compared with the same months in 2015.

In addition, since the scandal broke in September, Wells has seen a spike in consumer complaints.

The Consumer Financial Protection Bureau said this week that it received more complaints about Wells Fargo between September and November than it did regarding any other company. The agency collects consumer complaints and refers them to the appropriate company for a response.

The CFPB's public database shows that 3,990 complaints were filed against Wells Fargo between September and November. That number compared with 2,290 complaints involving the company between June and August 2016.

Of the nearly 4,000 complaints brought against Wells during the more recent three-month period, the vast majority of the complaints have since been closed, including more than 300 that resulted in monetary relief, according to the database.

Also Wednesday, Wells Fargo said that its board of directors is withholding 2016 cash bonuses to CEO Tim Sloan and seven other top executives, all of whom were members of the firm's executive committee as the scandal was unfolding last year. The eight executives will also see a 50% reduction in certain equity grants that vested recently.

The board's actions will reduce the executives' combined compensation by roughly $32 million, based on 2016 target bonuses and Wells' stock price, according to the company.

Wells said that the compensation decisions were based on "the accountability of all those in senior management for the overall operational and reputation risk of the company, and not on any findings of improper behavior."

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