Illinois Government withdraws investment in Wells Fargo

James Thorpe

Following recent reports that Wells Fargo employees opened millions of fake accounts in order to meet sales goals the Illinois state government has withdrawn around $30 billion in state investment activity. Illinois State Treasurer Michael Frerichs said "Wells Fargo is a big financial player in Illinois, and I hope to send the message that their unscrupulous practices are not welcome and will not be tolerated," in a press conference in Chicago. The move follows a similar move by the state of California which went further and fined Wells Fargo $185 million for their illegal activities. This is the second time in the past 4 years that Illinois has found Wells Fargo to have acted unethically. In 2012 Michael Frerichs noted that Wells Fargo paid a $175 million joint settlement, which included Illinois, to settle allegations its independent brokers racially discriminating against 3,000 mortgage borrowers.

In a statement released by Wells Fargo, spokesperson Gabriel Boenmer stated that the problems were in the commercial retail bank and that Government and Institutional Banking division has "diligently and professionally" worked with Illinois and many other states since 1970. In a similar action to that taken by State Treasurer Frerichs the City of Chicago has decided to divest $25 million it had invested in Wells Fargo. The decision comes at a time where the bank is facing mounting pressure over the fake accounts debacle. Last week California's treasurer barred the bank from making bond and investment deals in the state. The bank has taken full responsibility for its actions and is working on correcting them according to a bank spokesperson.