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* UPDATED x1 * Frerichs to suspend “billions of dollars” of investment activity with Wells Fargo

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* AP…

The Illinois state treasurer plans to announce that the state will suspend billions of dollars of investment activity with Wells Fargo.

Illinois Treasurer Michael Frerichs plans a Monday morning news conference in Chicago to give details about a moratorium on state business with Wells Fargo.

U.S. and California regulators have fined San Francisco-based Wells Fargo $185 million, saying employees who were trying to meet sales targets opened up to 2 million fake accounts without customers’ knowledge. The abuses are said to have gone on for years, unchecked by senior management.

* Reuters…

Wells Fargo made the list of 15 senior underwriters tapped by Illinois this month for bond sales over the next three years. A spokeswoman for Governor Bruce Rauner declined to comment on whether his office is rethinking Wells Fargo’s selection.

The presser started at 10 o’clock. A live stream is here.

…Adding… Bloomberg…

Chicago Treasurer Kurt Summers plans to divest $25 million the city has invested with Wells Fargo & Co. after the company admitted to opening potentially millions of bogus client accounts, joining state officials who have pulled business from the bank because of the scandal.

Summers, whose office manages the city’s $7 billion investment portfolio, plans to “unwind these assets as expeditious as possible in a fashion that is prudent and will protect taxpayer money,’’ according to a statement from his office sent to Bloomberg News.

“Today, the Office of the City Treasurer is proud to stand with working families from Chicago and across the nation by divesting in Wells Fargo & Co.,’’ according to the e-mailed statement. “Chicago deserves better.’’

*** UPDATE *** I’m told the Rauner administration won’t be using Wells Fargo for any new bond sales “until further notice.” The administration hasn’t done any bond business with Wells Fargo to date, and it chose not to do business with Wells Fargo on the current bond deal that’s in progress.

posted by Rich Miller
Monday, Oct 3, 16 @ 10:11 am

Comments

Funny, Wells Fargo reports two new accounts with the state just opened today.

Comment by PublicServant Monday, Oct 3, 16 @ 10:15 am
Public Servant, those accounts are empty.

Comment by Sir Reel Monday, Oct 3, 16 @ 10:19 am
Rich….this is a stupid way to run the railroad. Isn’t there an investment board to control theese kinds of herky jerkey reaction …..being accountable to only the “Voters” is bogus.

Comment by scott aster Monday, Oct 3, 16 @ 11:19 am
So the tax payers are getting better deals by not investing wells fargo?

Comment by groucho Monday, Oct 3, 16 @ 3:14 pm
It seems that there s politically convenient to dump o WFC at the moment but I would guess that TRS , SURS, ISBI and MERS likely own millions of shares( not dollars but shares) 0f the Bank so what Illinois has done is going to only cost Taxpayers money as these political calls drive down the stock price. Way to go

Comment by Sue Monday, Oct 3, 16 @ 4:10 pm
This is about as dumb of a political posturing statement as No Budget, No Pay. Let’s punish the investment side of the business for the work of the retail side!

Comment by Lost in Chicago Monday, Oct 3, 16 @ 4:57 pm
I didn’t know IL had $38B laying around to invest!

Comment by Jerry Monday, Oct 3, 16 @ 6:36 pm
In terms of the Pension systems, of which the Treasurer controls none and has a seat on only one (ISBI) I have never seen one of these ESG divestments not lose money. The funds out west that divested their gunmaker stock made a tidy profit.

I’ve got no quarrel with the treasurers’ initiative, but really would like to see a breakdown of the “billions of dollars invested with Wells Fargo.” I just can’t understand where all the cash/short term investments would be, particularly as we enter the time of the year when cash flow starts to tighten.

Comment by Arthur Andersen Monday, Oct 3, 16 @ 10:01 pm