Units of HSBC agreed to pay $75 million to settle the charges. Commodity Futures Trading Commission (“CFTC”) for manipulative and deceptive trading, and record-keeping failures. HSBC Holdings plc ( HSBC Quick Quote HSBC - Free Report) was charged by the U.S. However, Wells Fargo denied any wrongdoing and decided to settle to eliminate further litigation expenses. Accordingly, when these shortcomings surfaced, WFC's market value fell by more than $54 billion over two years ending in March 2020. ![]() Since 2018, WFC has been under consent orders from the Federal Reserve and two other financial regulators to improve its governance and oversight.īut shareholders alleged that Wells Fargo and its past management misinformed them about how swiftly the company was addressing the governance issues and risk-management systems due to which the bank opened millions of fake accounts. Financial Misconduct by Other FirmsĮarlier this month, Wells Fargo & Company ( WFC Quick Quote WFC - Free Report) agreed to pay $1 billion related to a lawsuit accusing it of overstating the progress on resolving its 2016 fake account scandal and thereby defrauding shareholders. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Over the past six months, shares of BAC have lost 23.5% compared with the industry’s fall of 14.5%.Ĭurrently, Bank of America carries a Zacks Rank #3 (Hold). The Office of the Comptroller of the Currency and CFPB said that BAC had a faulty fraud detection program that improperly froze the prepaid card accounts of thousands of people seeking jobless benefits in 2020-2021.Īpart from the fine, it was asked to pay redress to harmed consumers, which CFPB estimated would amount to hundreds of millions of dollars more. banking regulators over “botched” handling of jobless benefits during the pandemic. In July 2022, the bank was fined $225 million by a pair of U.S. However, the payments made to creditors should have been processed under the laws of the states where the customers lived. In May 2022, BAC was asked to pay a penalty of $10 million by The Consumer Financial Protection Bureau (“CFPB”) for processing illegal, out-of-state garnishment orders against customer bank accounts, thus violating state laws.īofA allegedly froze customer accounts unlawfully, sent payments to creditors based on out-of-state garnishment court orders and charged garnishment fees on its customers’ accounts. Elevated costs will, thus, hurt the company’s bottom line to an extent. Our Takeĭespite Bank of America’s cost-saving initiatives, continued legal issues faced by the entity are expected to increase its expense base in the near term. However, Burns dismissed claims that BofA violated California’s Unfair Competition Law and that it breached its contract with the state.Ī spokesperson for Bank of America refused to respond immediately to a request for comment yesterday.īofA had previously agreed to cease using automated fraud detection software to freeze accounts. Hence, Burns said that the cardholders should move ahead with the above-mentioned claims and others. The cardholders also claimed that BofA was unable to follow the Electronic Fund Transfer Act, which sets rules for banks to resolve account errors.īAC also violated California’s consumer privacy law by issuing cards with outdated magnetic stripes, rather than chip technology, leaving them subject to fraud. ![]() ![]() Per the benefits recipients, the bank broke federal law by failing to investigate fraud claims or summarily freezing tens of thousands of accounts. The San Diego judge asked the affected cardholders to move ahead with a proposed class action lawsuit against BofA, claiming that it violated state law by issuing cards to millions of people in California that lacked standard security measures. Bank of America Corporation ( BAC Quick Quote BAC - Free Report) should face a lawsuit for its failure to respond to unauthorized transactions on unemployment and disability benefits cards in California in 2020, per the U.S.
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