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Leigh Baldwin & Co.

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Diamonds and Dogs

3/29/19

Ride sharing giant Lyft (LYFT) getting a lift. The ride sharing giant is up 20% after being priced at $72 per share amid high demand, valuating the company at over $24 billion in the booming market for car sharing. The company beat rival Uber to the market in one of the largest and most closely watched initial public offerings of the year. The ridesharing industry has become one of the most transformational growth sectors of the US consumer market over the past five years.

 

The too big to fail bank is getting a new CEO. Wells Fargo (WFC) is down 2% at a three month low as CEO Timothy Sloan is stepping down. The 31-year company journeyman has faced 19 scandals during his era at the bank. A number of the top scandals include;

  1. 1.5 million fake deposit accounts and more than 500,000 fake credit cards. The bank had fired 5,300 low-level employees for this scandal.

  2. Wells Fargo improperly repossessing cars of military members. Wells Fargo paid $10 million to wronged service members.

  3. In 2017, an estimated 3.5 million more fake accounts emerged or were discovered.

  4. Wells Fargo did very poorly on an OCC test for community lending.

  5. Wells Fargo paid $5.4 million to a former Wells Fargo wealth manager, fired in 2010, after reporting potential fraud to a hotline.

  6. Wells Fargo was sued for allegedly overcharging small business retailers for credit card services, hitting them with massive early termination fees, targeting "mom-and-pop shops" without legal support.

  7. The city of Sacramento sued the bank, citing illegal practices that suppressed property values in minority and low-income communities.

  8. Wells Fargo was fined $1 billion settlement for auto-loan issues and mortgage practices. Wells Faro acknowledged they had charged people with car loans for insurance without their knowledge, even if they already had insurance.

  9. Wells Fargo's wholesale banking division altered business information like Social Security numbers and dates of birth without client knowledge. The bank was trying to comply with a deadline related to an anti-money laundering control.

  10. The SEC fined Wells Fargo $4 million for actively trading high-fee debt products that were not supposed to be actively traded.

  11. Wells Fargo refunded tens of millions of dollars to clients for adding services like pet insurance and legal services to consumers' accounts without consumers' full understanding.

  12. Wells Fargo agreed to pay a $2.1 billion fine after facing allegations that it had improperly represented mortgages it sold to investors during the housing bubble. The bank had to set aside $8 million to make things right for 625 people who were incorrectly denied loan modifications; 400 of them had their homes foreclosed upon.

    Other than that, the CEO and bank did a great job.

     

 

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