Hold onto your seats as we expose the dirty laundry of Wells Fargo and the SEC's allegations of excessive advisory fees charged to nearly 11,000 investment accounts. We're pulling no punches, diving straight into the murky waters surrounding Wells Fargo's notorious reputation for overcharging. Listen as we unravel the complexities of this controversial issue and discuss the $35 million civil penalties the bank agreed to pay to settle the matter, all without admitting or denying the SEC's charges.
Then, we'll shift gears and take you on a journey through the potential economic tsunami of auto worker strikes, which could reportedly cost a staggering $5 billion in a mere 10 days. We'll walk you through the intricate web of current labor contract negotiations and the potential consequences that could ensue. As a finale, we'll take you inside Jerome Powell's warnings about possible further rate hikes and the impact these high rates are having on real estate transactions. This is not just another business news show, it's an enlightening conversation that unearths the issues that could shape your business decisions. Tune in and stay informed. Don't miss out on the vital insights we're serving up just for you!
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SEC claims Wells Fargo overcharge fees are nearly 11,000 investment advisory accounts. Auto workers on strikes could cost $5 billion, and is Jerome Powell's choice to raise interest rates if he wants to? These are the top three headlines this week's weekly business brief. First up Wells Fargo overcharged nearly 11,000 investment accounts with advisory fees, sec alleges. According to CNN Business, for years Wells Fargo overcharged almost 11,000 investment advisory accounts about 27 million in fees, federal regulators allege on Friday. Guys, wells Fargo is notorious for this kind of game. They have a long, dirty laundry list of doing this. The Securities and Exchange Commission said Wells Fargo fees were excessive. Wells Fargo agreed to pay $35 million in civil penalties to settle the matter, without admitting or denying the SEC charges. Wow, the agency said Wells Fargo also paid account holders $40 million, including interest, to reimburse customers who'd been overcharged. According to the SEC, the excessive fees happened when certain Wells Fargo financial advisors and ones from firms that bank has since acquired agreed to reduce standard advisory fees for certain clients. However, the SEC found that account processing employees at Wells Fargo and processors firms sometimes failed to enter the lower advisory fees rates into the billing systems. Like I said a moment ago, wells Fargo is notorious for this. Back when they were Wacovia. When they acquired Wacovia in 2007, 2008, somewhere around there, when the banks were failing, they had a big scandal back then similar to this. Regulators said Wells Fargo failed to use compliance systems designed to ensure billing systems contained accurate data and didn't effectively monitor that the bank was not overcharging clients. The SEC also said Wells Fargo overcharged some clients who opened accounts prior to 2014 through the end of 2022. Next up ruling auto worker strikes could cost $5 billion in 10 days, new analysis says, reported by CNBC. If the United Auto Workers Unit decided to strike against Detroit's big three automakers, which right now it's under version they're having issues in negotiations current labor contracts expire next month the economic effect would quickly tally into the billions. According to a report released on Thursday, a work stoppage by nearly 150 workers at General Motors, ford Motors and Stalys were results in an economic loss of more than $5 billion just after 10 days. According to Anderson Economic Group, a Michigan-based consulting firm that closely tracks such events. Aeg estimates that the total economic loss, by calculating potential losses to the workers, the manufacturers and to the auto industry more broadly, if the sites cannot reach a tentative agreement before the current contracts expire at 11.59 pm Eastern on September 14. During the last round of bargaining in 2019, a breakdown in negotiations between the automakers and the union led to a national 40-day strike against General Motors. The automaker said the strike cost them $3.6 billion that year in earnings. The president of the union, jean Fein, during a Facebook live event on Tuesday, reaffirmed that the expirations of the contracts are deadlines, not suggestions. He said the union has no plan to extend the current contracts to allow for bargaining to continue without a strike, which was previously a common practice. And lastly, fed Chair Powell calls inflation too high and warns we are prepared to rate further. Reported by CNBC Federal Reserve, jerome Powell on Friday called for more vigilance on the fight against inflation, warning that additional interest rate increase could be yet to come, while acknowledging that progress has been made and saying the Fed will be careful in where it goes from here. The central bank leader said inflation is still above where policymakers feel comfortable. He noted that the Fed will remain flexible in its in contemplates future moves, but gave little indication that it's ready to start easing any time zone. Quote. Although inflation has moved down from its peak a welcome development it remains too high. End of quote, powell said and prepared remarks for his keynote address in Kansas City Fed's annual retreat in Jackson Hole, wyoming. We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down towards our objective. The speech resumed remarks Powell made last year at Jackson Hole, during which he warned that some pain was likely and the Fed continues the effort to pull runaway inflation back to 2%. The lower monthly reading core inflation in June and July were welcome, but two months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal, said Powell. Powell acknowledged that risk are two-sided, with dangers of doing both too much and too little, and it's really right now, really tough right now, for businesses to do business with these type of rates when transacting real estate. Right now it's very difficult. Real estate is starting to really feel the pain of this. Multifamily is really feeling the pain of this. There are some reports that transaction in multifamily are down 80% year over year because a lot of sellers want to sell their properties at 2021 prices, not realizing that we have 2023 interest rates. The interest rates are not allowing deals to go through, because an investor cannot buy a property at a high interest rate and a high price where they're negative cash flowing. And this has been your weekly business brief. I'll see you guys next week. Peace.