The Wells Fargo fake accounts scandal took a turn for the worst earlier today. This morning, Wells Fargo (NYSE:WFC) announced a 67% increase in the estimated number of unauthorized accounts for customers. Initially, the bank's estimation of the number of fake accounts was 2.1 million. Futhermore, Wells Fargo faced additional scrutiny following reports of unauthorized auto insurance charges.
Reaction to New Wells Fargo Fake Accounts
Without missing a beat, public figures voiced their disdain regarding the Wells Fargo news. Among politicians, Senator Elizabeth Warren called for the Federal Reserve to remove every board member of Wells Fargo. Thereafter, CNBC market commentator, Jim Cramer, supported Senator Warren's idea to remove the current board members. On Wednesday, Warren Buffett of Berkshire Hathaway stated, "Anytime you put the focus on an organization that has hundreds of thousands of people working for it, you may very well find it wasn’t just the one that misbehaved."
— Elizabeth Warren (@SenWarren) August 31, 2017
Wells Fargo--well i have had it. . @SenWarren go to work! this is not acceptable. No board member should stay,. No exec either
— Jim Cramer (@jimcramer) August 31, 2017
Wells Fargo Fake Accounts Effect on Stock
Remarkably, Wells Fargo stock traded slightly lower following the headlines about additional fake accounts. By market close, WFC traded down .56%. However, it is unclear if this gap down is even due to the recent news. Other bank stocks, like JPMorgan Chase & Co (NYSE:JPM) also closed down today. Here is the live chart of Wells Fargo stock:
The controversies surrounding Wells Fargo over the last year has put long-term investors in a difficult position. The company's poor public relations strategy and the new reports of unauthorized auto insurance plans create additional uncertainty for shareholders. In the past month, WFC stock fell about 6%. In light of the updated number of fake accounts, many investors and market pundits are expecting continued weakness in the near future.