Wells Fargo shares sink after Federal Reserve crackdown

IndustriesAssociated Press

Wells Fargo (NYSE:WFC) is under severe pressure ahead of the first day of trading since the Federal Reserve said it would freeze growth at the bank following a series of scandals.

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The company's stock was down as much as 9 percent before the opening bell Monday, erasing about $7 billion in market capitalization.

WFCWELLS FARGO & COMPANY59.17+0.36+0.61%

The Fed announced after the market closed Friday that it would restrict the bank's assets to the level where they stood at the end of last year until it can demonstrate improved internal controls.

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The reputation of Wells Fargo & Co. has been battered since acknowledging that it opened phony customer accounts and sold auto insurance to customers who didn't need it. It also refunded customers after acknowledging that its bankers unfairly charged fees to lock in interest rates on mortgages.

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