Wells Fargo - Take Two - Still More Bad News for Shareholders
As we've said before we don't think Wells Fargo’s Board [WFC] is pursuing the smartest of strategies when it comes to putting the many issues it faces into the "closed" pile.
That being said, in our opinion the latest $1,000,000,000 (actually two fines of half a billion each) fine is much better than any of the worst case scenarios as far as the company is concerned. One Billion is, while not chump change, rather small compared to the tens of billions in profit a bank like Wells Fargo brings in each year.
Of course, it is unfortunate that it’s the shareholders that will be bearing the majority of the cost of this fine. A $100 million dollar fine on the Directors and Executives primarily responsible for these transgressions might have been a lot fairer. Maybe even a bit more so that the fine would go beyond the insurance companies. It might have also done much more to prevent events like this in the future.
But there are still more issues to be looked at Wells Fargo by the Feds, and that’s before the States all have their say. Also, we should not forget the possibility of some lawsuits against current and former Directors too.