Prudential Financial Inc. was accused of covering up fraudulent sales of life insurance policies through Wells Fargo & Co. to low-income customers, marking the latest flareup of the fake-accounts scandal plaguing the third-largest U.S. lender by assets.
Many of the customers, who often had Hispanic last names, didn’t know what they had purchased and there were “a large number of similarities” between the way Wells Fargo employees opened bogus bank accounts without customers’ knowledge and the way Prudential’s “MyTerm” policies were sold by the bank, three of the insurer’s former employees said in a lawsuit filed in New Jersey state court.
Three months after the Wells Fargo scandal erupted, resulting in the October departure of Chief Executive Officer John Stumpf, the San Francisco-based lender is still struggling to move past the crisis. Even as Donald Trump’s surprise election may ease pressure from Washington, an attempt to force aggrieved customers into closed-door arbitration is drawing a legislative backlash in California. Now, amid accusations of a cover-up at Prudential, alleged fake accounts are infecting another financial giant.
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