Feds probe Wells Fargo days after company paid $185M fine

Now Wells Fargo Chief Executive John Stumpf has a federal investigation problem.

Prosecutors from New York and San Francisco have begun a probe into the troubled bank six days after it paid $185 million to settle a regulatory probe that found it had opened 2 million bogus customer accounts to meet sales quotas.

Branch employees said they were pressured by managers to meet the quotas.

The accounts, opened without the knowledge of customers, resulted in fees as high as $50 apiece.

The bank, which didn’t admit or deny liability in settling the probes, said it fired 5,300 employees associated with the scam.

Stumpf told the Wall Street Journal the scam was the employees’ fault. The remark has sparked much criticism.

Now, the CEO is answering federal subpoenas seeking records and documents, according to the Journal, which first reported the probes.

There is no certainty investigators will find any wrongdoing. It was not yet determined if the probes, in their early stages, would be criminal or civil in scope.

The subpoenas are the latest blemish for Wells Fargo, which until Tuesday was the largest bank in the US by market capitalization.

The bank’s folksy neighborhood image is due in part to Warren Buffett being one of its largest shareholders.

Last week’s settlement with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Los Angeles City Attorney’s Office found Wells Fargo customers were charged $2.6 million in fraudulent fees.

Reforming Wells Fargo’s egregious behavior appeared to require more than just a settlement, however.

On Tuesday, although Stumpf said there was “no incentive to do bad things,” the bank eliminated product sales goals.

“The 1 percent [of the payroll] that did it wrong, who we fired, terminated, in no way reflects the great work the other vast majority of the people do,” Stumpf told the Journal. “That’s a false narrative.”

Despite the harsh words for the rank-and-file employees who were let go, the bank is honoring a $125 million retirement package for Carrie Tolstedt, who retired in July from her role as senior executive vice president of community banking.

Shares of Wells Fargo fell nearly 1 percent, to $46.52, on Wednesday. They are down nearly 8 percent since the scandal broke last week.

Representatives for Wells Fargo and the US Attorney’s Northern District of California declined to comment. Prosecutors in Manhattan didn’t return a request for comment.