U.S. regulators have taken bank and financial services firm, Wells Fargo to task, demanding that the bank dramatically improve its monitoring of financial crime. According to The Wall Street Journal, U.S. regulators are focusing on the bank’s procedures and tools, rather than on a specific event or client.

The bank refused to comment when approached by Reuters, so everything’s a little cloak and dagger right now.

WSJ News Exclusive: Wells Fargo is struggling with its regulatory obligation to monitor financial crime, the latest challenge in the bank’s yearslong effort to recover from a series of scandals https://t.co/zPCgyaLcQT https://t.co/zPCgyaLcQT

— The Wall Street Journal (@WSJ) November 16, 2023

What’s This All About?

In 2016, a scandal erupted around Wells Fargo’s sales practices and ever since the bank has been working to rectify a series of issues in its compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term processes. However, these steps have come under criticism from insiders at various points.

According to the WSJ reporting, authorities haven’t ruled out a fine for Wells Fargo, despite the fact that efforts to fix its processes are ongoing. So, there appears to be an issue there. It’s all very clandestine, but something’s certainly afoot.

Allowing a Ponzi Scheme?

Wells Fargo is also currently facing a lawsuit claiming it allowed Matthew Beasley, a Las Vegas attorney, to operate an alleged Ponzi scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term. In court filings the bank denied that "it had actual knowledge of, or provided assistance to, any alleged wrongdoing by Beasley," according to the WSJ report.

The news comes at a time when the bank is cutting back its physical operations to increasingly focus on digital services.