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SEC charges former Wells Fargo CEO and top executive with misleading investors over sales practices

Stock MarketsNov 13, 2020 03:26PM ET

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SEC charges former Wells Fargo CEO and top executive with misleading investors over sales practices

© Reuters. Wells Fargo CEO Stumpf testifies before Senate Banking Committee hearing on firm's sales practices on Capitol Hill in Washington

By Pete Schroeder

WASHINGTON (Reuters) - The Securities and Exchange Commission charged former Wells Fargo (NYSE:WFC) CEO John Stumpf and retail banking head Carrie Tolstedt with misleading investors, the watchdog announced Friday.

The agency claimed that the former executives misled investors about the widespread sales practice problems at the bank. Stumpf agreed to pay a $2.5 million penalty to settle the charges, while the SEC will litigate fraud charges against Tolstedt in court.

A lawyer for Stumpf did not immediately respond to a request for comment. An attorney for Tolstedt said she was an "honest and conscientious executive," and the SEC charges are "unfair and unfounded."

The new charges mark the latest in a long-running set of legal and regulatory woes for the bank and its former leadership, after the firm was embroiled in a massive scandal over the creation of fake accounts by employees. In February, the bank agreed to pay $3 billion to settle a joint probe by the SEC and Justice Department.

Stumpf and Tolstedt have faced individual sanctions as well. Stumpf was barred from the banking industry and fined $17.5 million by a banking regulator in January, and Tolstedt is facing a $25 million fine which she is fighting in court.

In the latest charges, the SEC said the pair misled investors about the health of their sales practices, and they should have known about deep-seated issues within the bank.

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Comments (6)

Luis Reyes Nov 19, 2020 5:29PM ET

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Wells Fargo and other banks still haven't fixed the toxic mortgages used to fool the investors. COVID forbearances will be another disaster. Will see if Biden and Harris again help Wall St get off free

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Junk_Man Nov 15, 2020 10:32PM ET

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He should be in jail...

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alex perez Nov 13, 2020 3:18PM ET

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White collar blue collar crimes should be judged the same..They deserve 14 years in Jail plus fines..

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m mori Nov 13, 2020 11:02AM ET

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he and she were decreped human beings. But they basically got off scott free..no justice

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Tony Coll Nov 13, 2020 9:50AM ET

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White collar crime is not considered real crime... now a starving human being, no job due to ravaged, robs a store for food and money, lock the person up throw away the key.

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Ernie Keebler Nov 13, 2020 9:43AM ET

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Why wouldn't he settle for 10 percent of his annual salary? Thievery pays well. The bank makes tens of billions and he made tens of millions on misdeeds. Crime pays as long as you are wealthy. Doesn't spend one day in jail or any real consequence.

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