Former Wells Fargo exec settles SEC fraud charges, to pay $3 million
6:09 pm Tuesday, May 30th, 2023
By Kanishka Singh
WASHINGTON (Reuters) -The former head of Wells Fargo & Co’s retail bank agreed to pay a $3 million penalty to settle U.S. Securities and Exchange Commission fraud charges for misleading investors about sales practices used to inflate a performance metric, the SEC said on Tuesday.
Carrie Tolstedt was charged in 2020 for her role in allegedly misleading investors about the success of Wells Fargo’s core business.
Tolstedt agreed in March to plead guilty to obstructing a bank examination in relation to the sweeping phony accounts scandal that roiled the bank in 2016, and faces prison time.
In the settlement announced on Tuesday, she did not admit or deny the SEC’s allegations.
From mid-2014 through mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s “cross-sell metric” as a means of measuring the bank’s financial success despite the fact that it was inflated by accounts and services that were unused, unneeded, or unauthorized, according to the SEC.
Wells Fargo paid $3 billion in February 2020 to settle federal civil and criminal probes in relation to the phony accounts scandal.
It admitted at the time that it pressured employees between 2002 and 2016 to meet unrealistic sales goals, which led them to open fake accounts for customers without their knowledge.
(Reporting by Kanishka Singh in Washington; Editing by Leslie Adler and Bill Berkrot)
