After a deeper investigation into its fraudulent sales scheme, Wells Fargo (WFC - Free Report) revealed that it discovered up to 1.4 million more fake accounts than it previously estimated, leading famous Wall Street commentator Jim Cramer to declare the company a “rogue bank.”
Wells Fargo just announced this new twist in its phony account scandal, which began after the allegations surfaced nearly a year ago, and now it looks like the extent of the bank’s fraud was significantly greater than anyone expected.
The company said it has now found a total of 3.5 million potentially fake bank and credit card accounts, up from the previous total of about 2.1 million. The newly discovered accounts were found during an analysis that searched back to January 2009 and reviewed the original suspect period from May 2011 to mid-2015.
On top of this, Wells Fargo said that it discovered a brand new issue, as more than 500,000 people were found to be enrolled in online bill pay without their consent. These new revelations are causing a deserved uproar around the markets on Thursday.
“It's not embarrassing, it's rogue. This is a rogue bank,” said CNBC’s Jim Cramer. “They thought they got to the bottom of it but they left out a million accounts. That does not seem like the bottom of this. This is so outrageous.”
Cramer also called on members of Congress to continue investigating the company. Earlier this year, Sen. Elizabeth Warren called for the ouster of 12 Wells Fargo board members.
Meanwhile, billionaire investor Warren Buffett took to the airwaves to defend the bank. “What you find is there's never just one cockroach in the kitchen when you start looking around,” the CEO of Berkshire Hathaway (BRK.B) told CNBC. Berkshire is Wells Fargo’s largest shareholder.
Shares of the bank were down nearly 0.7% through early morning trading hours Thursday. The stock has now lost about 5.5% over the last month, bringing its year-to-date slump to nearly -7%. As for now, Wells Fargo remains a Zacks Rank #3 (Hold).
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