Wells Fargo, Awash in Scandal, Faces Violations Over Car Insurance Refunds

Wells Fargo, the scandal-plagued bank, is facing new regulatory scrutiny for not refunding insurance money owed to people who paid off their car loans early, according to people briefed on the inquiry.

Just last month Wells Fargo was found to have forced unneeded collision insurance on consumers who financed their car purchases. That practice, first disclosed by The New York Times, affected 800,000 customers according to an analysis commissioned by the bank. Some 274,000 people were pushed into delinquency as a result, and 25,000 cars were wrongly repossessed.

The latest inquiry, by officials at the Federal Reserve Bank of San Francisco, where the bank has its headquarters, involves a different, specialized type of insurance that is sold to consumers when they buy a car. Called guaranteed auto protection insurance, or GAP, it is intended to protect a lender against the fact that a car — the collateral for its loan — loses significant value the moment it is driven off the lot.

GAP insurance, also known as guaranteed asset protection, makes up that difference for a lender if, for instance, a car is stolen before the loan is paid off. Regular car insurance typically covers only the current market value. read more »

Securities Department reaches ponzi scheme settlement

In a settlement, Minneapolis-based Questar Capital Corporation securities broker will pay $2.4 million to victims of a former agent's ponzi scheme.

In an investigation, the North Dakota Securities Department found Kevin Wanner, a registered securities agent of Questar doing business under the trade name Precision Financial, appears to have operated a ponzi scheme for more than 15 years. He allegedly victimized 66 North Dakotans, selling fictitious brokered certificates of deposit and unregistered interests in pooled investments.

Rather than investing the money, the department said Wanner was pocketing most of it for personal use, and, in classic ponzi-scheme style, using money from one investor to pay interest to the next in order to keep the scheme going. read more »

Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

The cautionary words of American regulators have done little to chill a red-hot market for new virtual currencies sold by start-ups.

The Securities and Exchange Commission late last month issued its first warning for the many entrepreneurs who have been raising money by creating and selling their own virtual currencies in what are called initial coin offerings. At that point, hundreds of projects had raised more than $1 billion.

Yet even after the commission said it was looking closely at projects that may violate its rules, programmers are still embarking on new offerings at a torrid pace. Most of the offerings have little legal oversight and some appear to conflict with the commission’s basic advice. read more »

Behind the Push to Keep Higher-Priced EpiPen in Consumers’ Hands

Despite availability of generic version, the brand-name allergy drug still takes a big share of the market; the complex role of middlemen

Something strange happened when Alice Bers went to the pharmacy earlier this year to fill her son’s EpiPen prescription: The doctor had prescribed the generic, but it would have cost her more out-of-pocket than the branded version.

So the pharmacy asked her son’s doctor for a prescription for the brand-name EpiPen, and her health plan got a bill for $438.53, or $227.52 more than the generic would have cost it. Many EpiPen customers, from a range of different health plans, have wound up getting the more expensive brand.

“I couldn’t believe how crazy our system is that it cost us less to get the brand name, while of course it cost our insurer more,” Ms. Bers said.

The high cost of EpiPens was a red-hot controversy and target of congressional hearings last year, prompting the device’s maker, Mylan, to introduce a lower-priced generic version of the emergency allergy treatment, and rivals to bring their own products to market. read more »

Bank of Tokyo-Mitsubishi UFJ fined for futures Spoofing

Bank’s trader placed multiple orders for futures contracts with an intent to cancel the orders before their execution. read more »