Wells Fargo has displayed behavior that is "beyond outrageous" and investors should dump the stock, according to banking analyst Dick Bove.
A day after news broke that the second-largest bank in the U.S. by assets paid a $185 million fine for what regulators called "widespread illegal" sales practices, Bove ripped the company and gave it the only sell rating in his entire 35-bank coverage universe.
"What Wells has done is it's saying that it's treating customers badly, it broke faith with customers," Bove, vice president of equity research at Rafferty Capital Markets, said in a phone interview. "There is no business in the world that can treat its customers badly and continue to expect to grow."
In a civil agreement with the U.S. Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the Los Angeles city attorney's office, Wells Fargo neither admitted nor denied wrongdoing.
However, the allegations are damning: Authorities accuse Wells Fargo of creating accounts for customers across multiple product lines without telling them. Employees would, for instance, issue ATM cards, falsely tell customers that certain products had to be bought in tandem with others, and conduct a number of other schemes to boost their sales numbers, according to allegations.
It was all part of a high-pressure sales culture and ultimately, according to the company, would result in the firing of some 5,300 workers at multiple levels.