- Wells Fargo (WFC -0.7%) yesterday was fined $185M over its employees opening millions of fraudulent deposit and credit card accounts in order to meet sales targets and collect bonuses. The bank has fired 5.3K over improper practices.
- Over at Rafferty, Dick Bove downgrades Warren Buffett's ([BRK.A]], BRK.B) favorite bank, calling it a "very big problem," that's caused "significant" damage to Wells' business model.
- While "cross-selling" is something most lenders try to do, Wells Fargo has built its brand around this theme more than its peers. The charges, says Bove, reopens the question about whether customers can trust their banks and to whether another wave of regulation is needed.
- Compass Point's Isaac Boltansky says the news is "bigger than WFC" and should be viewed as "clear, undeniable warnings" to the entire industry on cross-selling. The bit firmly between its teeth now, look for more enforcement actions from the CFPB.
- Similar thoughts are hitting the tape from Sandler O'Neill, Evercore ISI, and RBC.
- Interested parties include: BAC, JPM, C
- ETFs: KBE, KRE