Wells Fargo responds to WSJ story, calls it 'misleading'
Wells Fargo strongly disputes the characterization of its foreign exchange pricing as being unfair and unfavorable to its customers, as alleged in a story published by The Wall Street Journal on November 28. "We informed The Wall Street Journal that their story had fundamental inaccuracies before they published," said Wells Fargo Wholesale Banking head Perry Pelos. "We provided pricing data and other information that revealed inaccuracies in the story or that were counter to its negative portrayal of our FX business. Our points and views were either absent in the finished story or not taken seriously by the paper." Points in the story that the company takes issue with include: The assertion that an internal review showed that out of roughly 300 fee agreements only about 35 companies were charged the actual price they had been offered for currency trades is factually incorrect. No internal review leading to that conclusion was conducted by the business. The paper's characterization appears to be tied to unnamed sources and an alleged conference call referenced in the story's opening that could not be verified by our company as having occurred. The Wall Street Journal also implied Wells Fargo is pricing FX transactions in the range of 1% to 4%. The Journal further suggested that such pricing was improper and outside of industry norms, when, in fact, it was explained to the publication that wider-spread outcomes are not uncommon in smaller and lower volume FX transactions, depending on transaction size and type. Such spreads are not reflective of pricing on the full range of transactions, however. Wells Fargo confirmed that the weighted average spread in 2016 for all of its middle market transactions was 18 basis points, which is within the lower end of the middle market range of 15 to 50 basis points cited by the paper. Further, The Journal elected to use a misleading graphic, which showed industry average fees, but disregarded the weighted average volume for Wells Fargo middle market fees, which were provided to the paper. This resulted in an unfair comparison. The Journal, in an attempt to sensationalize what it asserted was a sales-driven culture in the FX business, elected to report that a bell was rung whenever a major sales transaction was completed. Nothing like this has occurred for more than a decade in our FX business - also a fact provided to The Journal - but not included in the story. "While we have made some mistakes in the past, we always work to make it right for our customers, and invite them to reach out to us if they have any issues. But, in our view, the article's characterization of our overall business practices and commitment to our FX customers is misleading and unfair," said Wells Fargo CEO and President Tim Sloan. "We proudly serve thousands of customers in our foreign exchange business and are committed to helping them succeed."