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Wells Fargo's costly public stumbles continue into 2018

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Wells Fargo's costly public stumbles continue into 2018

The sharp drop in Wells Fargo & Co.'s stock price on Feb. 5 exacerbated its underperformance compared to the bank sector, as it has endured more than a year of public stumbles and made changes in its executive ranks and boardroom.

Wells Fargo's latest tumble came after the Federal Reserve capped the entire company's assets at 2017-end levels, a first for the regulator. Since September 2016, Wells Fargo has been dealing with the aftermath of a sales scandal in which it opened millions of unauthorized accounts.

The bank fired about 5,300 employees regarding the initial disclosure. In the past 17 months, it has replaced its CEO and twice named a new board chair. Four directors will step down in 2018 in relation to the Fed's latest action.

Since the scandal, Wells Fargo's price gains have lagged the broader industry, which has been riding high since late 2016. The SNL U.S. Bank & Thrift index's total return was 49.1% from Sept. 7, 2016, through the close of Feb. 5, 2018. Wells Fargo's stock returned 21.9% in that time.

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