American Express (AXP) remained grounded on Wednesday and turned down further just an hour before market close as a report surfaced that its foreign exchange pricing practices are in the early stages of investigation by the Federal Bureau of Investigation.
According to a Wall Street Journal report, the FBI has started an investigation into the misrepresentation of pricing to clients by the company’s foreign exchange international payments division in getting more business. The federal agency did not confirm the investigation.
The investigation will focus on whether the credit card lender misled customers in the process of attracting more business to the international payments division. In July, Amex said it would settle any disclosed problems after instructing a third-party review by Debevoise & Plimpton LLP on its FX business.
The review comes on heels after WSJ stated that exchange rates were boosted for business customers without intimation by certain employees of the company. This was later confirmed by a group of employees as the practice was encouraged due to the company’s commission-driven culture.
The company’s employees were attracting customers with low initial rates but not informing them of the change in the prices. In addition, the pricing and the potential rate hike disclosure has been under investigation of the Office of the Comptroller of the Currency, according to the WSJ.
Shares of American Express ended Wednesday’s regular session down 1.24% at $105.68 on the NYSE. The stock has gained more than 6% so far in this year and about 24% in the past year.