Wells Fargo plunged more than 6% intraday due to restrictions on new business operations stemming from financial crime risk control deficiencies

Due to deficiencies in risk management, Wells Fargo's stock price plunged during the trading session after being restricted by US regulators from conducting new business.

During the midday trading session on Thursday, September 12th, Eastern Time, Wells Fargo's stock price, which had risen by 1.1% at its daily high, quickly turned downward, with an intraday decline of over 6.5% at its daily low. Subsequently, the decline narrowed to within 4%.

Prior to the plunge in Wells Fargo's stock price, the Office of the Comptroller of the Currency (OCC), the highest banking regulatory agency in the United States, announced on Thursday that it had found deficiencies in the bank's operational and anti-money laundering (AML) internal controls in financial crime risk management. As a result, the OCC took enforcement action against the bank, requiring it to take remedial measures.

According to the requirements of the enforcement action agreement, Wells Fargo must obtain OCC approval before engaging in new business in areas with high AML or US sanctions-related risks in the future. However, the OCC did not seek to impose any fines on the bank.

Subsequently, Wells Fargo issued a statement in response to the OCC's enforcement action. The statement stated that the company must strengthen AML compliance before expanding certain businesses/services. The statement also mentioned that the bank has been working diligently to address most of the formal enforcement agreement requirements and committed to completing this work with the same sense of urgency as fulfilling other regulatory commitments