Bank

Wells Fargo is under severe pressure ahead of the first day of trading since the Federal Reserve said it would freeze growth at the bank following a series of scandals.

The Fed announced after the market closed Friday that it would restrict the bank’s assets to the level where they stood at the end of last year, until it can demonstrate improved internal controls.

Read: Comply with OBSI, say regulators

Wells Fargo’s stock was down 9% before the opening bell Monday, erasing about US$7 billion in market capitalization. The stock was trading around US$64 on Friday, compared to around US$59 as of 10am EST today.

The reputation of Wells Fargo & Co. has been battered since its acknowledging that it opened phoney customer accounts and sold auto insurance to customers who didn’t need it.

It refunded customers after acknowledging that its bankers unfairly charged fees to lock in interest rates on mortgages.

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Originally published on Advisor.ca
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