Massachusetts Becomes Latest State to Penalize Wells Fargo
Massachusetts became the latest state to penalize Wells Fargo & Co. over its bogus accounts scandal by pulling the bank from a list of approved bond underwriters.
Treasurer Deborah Goldberg suspended Wells Fargo for one year effective Monday, said Chandra Allard, a spokeswoman.
The state is scheduled to sell general-obligation debt by auction in November. Goldberg asked staff to review other contracts and investments with the San Francisco-based bank.
“Wells Fargo has treated their employees, their customers, and the general public in a completely reprehensible fashion,” Goldberg said in an e-mailed statement.
Massachusetts follows California, Illinois and Ohio in pulling its business from Wells Fargo, which agreed to pay $185 million to resolve claims that employees opened accounts consumers didnt know about to boost sales tallies. Federal prosecutors in New York and San Francisco have opened criminal inquiries. The bank faces lawsuits by fired or demoted workers, customers and investors. Local governments such as Chicago and Seattle have also withdrawn some of their business.
“We value the commonwealth of Massachusetts business and will work to earn it back,” Jessica Ong, a spokeswoman for Wells Fargo, said in an e-mailed statement. We will continue to serve our Massachusetts customers and be the same, committed community partner in the state, where 1,300 of our team members live and work.”
Massachusetts issued about $7.5 billion of municipal debt in the first six months of the year, according to data compiled by Bloomberg. Wells Fargo, the fifth-largest underwriter of muni debt overall during that period, didnt rank in the top three firms for the state.