Former Wells Fargo exec settles SEC fraud charges, to pay $3 million

WASHINGTON, Might 30 (Reuters) – The previous head of Wells Fargo & Co’s (WFC.N) retail financial institution agreed to pay a $3 million penalty to settle U.S. Securities and Alternate Fee fraud costs for deceptive traders about gross sales practices used to inflate a efficiency metric, the SEC mentioned on Tuesday.

Carrie Tolstedt was charged in 2020 for her function in allegedly deceptive traders concerning the success of Wells Fargo’s core enterprise.

Tolstedt agreed in March to plead responsible to obstructing a financial institution examination in relation to the sweeping phony accounts scandal that roiled the financial institution in 2016, and faces jail time.

Within the settlement introduced on Tuesday, she didn’t admit or deny the SEC’s allegations.

From mid-2014 via mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s “cross-sell metric” as a method of measuring the financial institution’s monetary success even though it was inflated by accounts and companies that had been unused, unneeded, or unauthorized, in response to the SEC.

Wells Fargo paid $3 billion in February 2020 to settle federal civil and legal probes in relation to the phony accounts scandal.

It admitted on the time that it pressured staff between 2002 and 2016 to fulfill unrealistic gross sales targets, which led them to open faux accounts for purchasers with out their information.

Reporting by Kanishka Singh in Washington; Modifying by Leslie Adler and Invoice Berkrot

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