NEW YORK (TheStreet) -- Wells Fargo's (WFC) sales practices are now being investigated by the SEC according to a filing the bank issued on Thursday. The list of federal and state agencies looking into the company has been growing ever since it was disclosed in September that the company's employees opened at least two million accounts in customers' names without their permission. Employees said they were pushed to do so in order to meet Wells Fargo's aggressive sales goals.
As a results of the phony accounts scandal more than 5,000 Wells Fargo employees were let go. However, company executives thrived thanks to its sales culture, Bloomberg reports.
Bloomberg News' Laura Keller appeared on this morning's "Bloomberg Markets: America's" to discuss what she discovered about this from her interview with several current and former Wells Fargo employees.
In speaking with employees, Keller and her team found that over time there was a "generation of managers" that were being promoted across the bank and given better positions in different parts of the country, while employees under them were opening up bogus accounts.
These managers were being held as the standard to which other employees should strive to reach. Specifically, these top performing managers were spreading out from Southern California and were the "focal point" of the misconduct and helped to spread the culture that "lionized boosting sales," Keller and the others said in the report on Bloomberg.com.
"Then you also had the bank talking about firing 5,300 low level employees because of all these accounts and abuses that were happening underneath these managers that were rising across the bank," Keller said on BloombergTV.
In an effort to win back trust Wells Fargo is conducting internal investigations and its board has also started to investigate, hiring an outside law firm. Additionally, the company higher-ups are said to have identified some managers that they would like to terminate over this issue.
Wells Fargo stock is up this afternoon.
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Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate WELLS FARGO & CO as a Buy with a ratings score of B. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: WFC