The Justice Department told Wells Fargo (NYSE:WFC) to hold an independent investigation of its wealth management business after whistleblowers from the bank told the agency that there were sales problems, people familiar with the situation told The Wall Street Journal.
The whistleblowers alleged that Wells Fargo's wealth management business pushed particular products or services with an emphasis on compensation rather than what was best for the customer, the Journal reported. The law firm Shearman & Sterling is said to be handling the investigation.
The whistleblowers’ claims include Wells Fargo's brokerage division, which is known as Wells Fargo Advisors, the Journal reported. Representatives of Wells Fargo hadn't return calls from FOX Business at the time of publication.
A month ago, the Federal Reserve said in a statement that it "would restrict the growth of the firm until it sufficiently improves its governance and controls.” Sen. Elizabeth Warren, D-Mass., questioned Fed Chairman Jerome Powell about Wells Fargo during a hearing Thursday.
Wells Fargo has paid hundreds of millions of dollars in fines to various regulators for abuses, including opening deposit and credit card accounts without the authorization of customers.