Legalwise, it has not been a great week for Wells Fargo. First it was ordered by a US regulator to pay $14m for failing to uphold conduct standards and then a jury ordered the financial services company to pay $200m for infringing on two patents.
Let’s start with the latter. On Monday November 11 Business Insider reported that a US district court jury in Texas had ordered Wells Fargo to pay the second massive fine.
It slammed the business with the $200m bill after finding Wells Fargo guilty of infringing on two patents held by USAA, the American financial services company.
The two patents were for an auto capture process that simplify check deposits made with mobile phones. It originally built the technology internally in 2005 and was granted the patents in 2011.
Since then it has been seeking royalties from banks using the feature. This is the first time that it has won a court battle against a business for infringing on the patent. It is believed that the verdict could be used by USAA as a foundation for future legal battles.
But this is not the first fine Wells Fargo has been slammed with in November.
On November 8, the U.S. Commodity Futures Trading Commission (CFTC) ordered Wells Fargo to pay $14m for violating multiple swap dealer business standards.
CFTC accused Wells Fargo of having failed to deal with a counterparty in a fair and balanced manner set out by the standards and for neglecting to put in monitor system to ensure it complied to policies and procedures regarding those standards.
The case originates from 2014 when Wells Fargo was tasked with exchanging $4bn to CA$4.347bn. The transaction was to be priced at the weighted average spot rate on the day.
Employees at the multinational knew this would require the company to provide a weighted average rate based on actual spot trades. However, Wells Fargo did not have a system in place that could accurately track trades in the way needed to fulfil the order.
Wells Fargo still went ahead with the deal, calculating the what it believed would be in the range of the weighted average. It also provided the client with a spreadsheet that it claimed to have made the calculations on, which did not reflect the actual trades.
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