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Wells Fargo still suffering financially from scandals

Tom Fox | January 15, 2018

How much do corruption scandals actually hurt a company in the pocketbook, as in drop in profits? That question is often debated in the FCPA world as a stock dip when an FCPA investigation is eventually offset when the stock price rises. As counter-intuitive as it sounds, when a company settles an FCPA enforcement action, the stock price usually goes up because at least the costs are relatively well-known at that point.

Wells Fargo is still reeling from its fraudulent accounts and assorted other scandals. Reports indicate that the bank is still grappling with the regulatory, internal, and customer fallout from the ongoing scandals. Last fall, the bank had announced its profits had dropped some 18 percent in light of the bank’s announced reserve of $1bn for legal expenses. From the regulatory perspective (separate and apart from President Trump’s...

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