Wells Fargo reportedly fires foreign exchange execs amid investigations

Key Points
  • Regulators are investigating Wells Fargo's investment-banking business, while the bank also conducts an internal probe, The Wall Street Journal says, citing sources.
  • Wells Fargo has also fired four foreign-exchange executives.
  • The bank did not immediately respond to a CNBC request for comment, and shares held 2 percent higher Friday afternoon.
A protester outside a Wells Fargo branch in New York City.
Erik McGregor | Pacific Press | LightRocket | Getty Images

Wells Fargo fired four foreign-exchange executives amid an investigation into that business both internally and from regulators, The Wall Street Journal reported Friday, citing sources familiar with the matter.

Wells Fargo confirmed the departures to the Journal and CNBC.

Shares of Wells Fargo remained about 2 percent higher Friday afternoon.

The executive firings and investigation into the investment-banking division would add to Wells Fargo's existing struggle with scandal in its consumer banking business.

The bank paid $185 million in penalties after it was revealed last year that employees opened millions of unauthorized consumer deposit and credit card accounts for years in order to meet aggressive sales goals, a practice the bank said it has since ended. In August, the bank said an expanded third-party review identified about 3.5 million such accounts and that Wells Fargo has now paid millions in total customer refunds or payments.

The bank appointed a new CEO, Tim Sloan, last October, and announced a reorganization of its board this summer.

In late July, news broke that hundreds of thousands of Wells Fargo customers were charged for auto insurance they did not need.

This week, the Office of the Comptroller of the Currency sent a confidential preliminary report to Wells Fargo that criticized the bank for the auto insurance sales practices and how it handled the problem, The New York Times reported Friday.

The OCC report also said Wells Fargo may need to refund customers more than the $80 million the bank has set aside for payouts, the Times said. A person familiar with the matter told the Journal the same thing.

The OCC declined to comment to the Times and did not immediately respond to a CNBC request for comment.

Wells Fargo told the Journal that the bank has discontinued the auto insurance-related product. "We will continue to work with regulators on the remediation and will make improvements to our auto lending business," a bank spokeswoman told the Journal.

Noted investor Steve Eisman said Thursday he is betting against Wells Fargo shares due to deep "cultural issues" that will take time to unwind. Eisman bet against the housing market ahead of the financial crisis, which was depicted in the movie "The Big Short."

About 0.6 percent of Wells Fargo shares available for trading are sold short, or in anticipation of a decline, according to FactSet.

Wells Fargo was once considered one of the most upstanding banks in the U.S. The stock is little changed for this year in contrast to the S&P 500 financial stocks' 14 percent gain.

Read the full story in the Wall Street Journal here.