Just a few weeks ago, none other than Warren Buffett seemed to be certain that Wells Fargo & Co. was leaving its scandals behind
"I like Tim Sloan as a manager," Buffett said of the leader of the bank's shareholder meeting 5th of May. "He corrects mistakes made by others."
Not so fast: Wells Fargo has a new problem, even though Sloan struggles to calm the old ones. Later this year, employees of the bank's wholesale unit changed internal records of corporate clients without their knowledge, according to a person who was called into the case.
The news has a tremor caused by Wells Fargo stock on Thursday, but the bigger problem is how the company does not seem to be out of trouble, despite public assurances that it is cleaning itself up.
Wells Fargo discovered the inappropriate activity and reported it to the Office of the Comptroller of the Currency, which is investigating. At this point, there is no evidence that the data changes involved false information, the person said.
Sloan aims to establish a corporate culture that allowed shorts and bad behavior to thrive for years until it broke out in September 201
Read more: Politicians still use the bank as a punching bag
Sloan was confident enough in his efforts around the turn, earlier this month he launched "Re-Established," an ad campaign that emphasizes that she has problems approach and do things right. In a press release, the Chief Executive Officer said it was "a turning point in expressing that we are fundamentally different today and that it feels like a new day in Wells Fargo."
Efforts to identify more proactively problems can cause more problems to become public. In this case, the staff marked what they perceived as a problematic behavior, which was rapidly disrupted by the person familiar with the matter. Sloan himself said in the "Re-Established" press release and recent meetings with investors and media outlets that there is still a lot to do.
The latest issue came when workers ran to meet a regulatory deadline, money laundering checks, according to the Wall Street Journal. The bank had promised the US authorities in 2015 to overhaul the systems in its wholesale department for illegal transactions. In April, the Journal reported that the San Francisco-based company was still struggling to collect records containing proprietary information about its business customers and was planning to ask the OCC to extend a deadline of 30 June to deliver on its promise Campaign
The impact of the new disclosure on Wells Fargo's rebranding efforts depends on whether they attract the attention of consumers and investors, according to Miro Copic, consultant and marketing professor at San Diego State University. The bank's shares fell 1.5 percent on Thursday, the largest decline in more than a month and nearly twice as high as any other major lenders.
"If they really believe that this current circumstance is less serious than the previous stay on the course," said Copic. "If history brings you more, then I think you're in bigger trouble." The company may need to increase its advertising budget, he said.
Alan Elias, a spokesman for Wells Fargo, said in a statement that companies can not comment directly on regulatory issues.
"But in recent months we have developed more robust internal processes that reinforce our values, and when we find situations where behavior violates these values, we quickly take action properly," he said. "This concerns documents used for internal purposes, no customers were negatively impacted, no data left the company, and as a result, no products or services were sold."