Former Wells Fargo chief executive officer John Stumpf agreed to pay $2.5 million to settle charges from the Securities and Exchange Commission related to his certification of misleading statements made to investors over the banks’ fraudulent “cross-selling” strategy.

Carrie Tolstedt, the former head of Wells Fargo’s Community Bank, was charged with endorsing the bank’s cross-selling metric as a means of measuring its financial success.

Stumpf has agreed to settle the civil charges without admitting or denying guilt. He agreed to a lifetime ban from the banking industry and a $17.5 million fine for his role in the fake-accounts scandal and other misconduct in January.

In addition to civil penalties, the SEC is seeking to ban Tolstedt from becoming an executive officer or taking a seat on a corporate board. She is fighting the fraud charges.

“If executives speak about a key performance metric to promote their business, they must do so fully and accurately,” Stephanie Avakian, director of the SEC’s division of enforcement, said in a statement. “The Commission will continue to hold responsible not only the senior executives who make false and misleading statements but also those who certify to the accuracy of misleading statements despite warnings to the contrary.”

The bank announced it was clawing back $28 million in compensation paid to Stumpf and $47 million from Tolstedt after a six-month investigation by its independent directors determined Stumpf had been “too slow to investigate or critically challenge” the bank’s sales tactics.”

The board also said Tolstedt and other bank leaders were “unwilling to change the sales model or recognize it as the root cause of the problem,” and that they “resisted and impeded scrutiny or oversight” and even “minimized the scale and nature of problems.”

In February, the SEC announced that Wells Fargo had agreed to pay $500 million to settle charges that it misled investors about its community bank, its largest unit.

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2 responses to “Wells Fargo Former Execs Charged With Misleading Investors”

  1. Without knowing much greater detail of the selling tactics and such, I would on the surface have serious doubt about fraud in promoting cross-selling of products. That said, the opening of accounts and so forth is totally wrong. I guess I am questioning the ‘criminal’ aspect of the case.

  2. How much longer will the SEC, the FED, and state banking agencies keep putting up with Wells b.s.?
    Until Nancy P is gone since she lives in Wells’ hometown?

    Wells should have gotten the death penalty many times over

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