Wells Fargo & Company (NYSE: WFC) agreed to pay $500 million to settle a complaint alleging that it misled investors between 2002 and 2016. The money will be returned to investors harmed by the bank’s misconduct, according to the Securities and Exchange Commission (SEC).
The federal securities regulator clarified that the $500 million payment is part of a combined $3 billion settlement by Wells Fargo with SEC and the Department of Justice (DOJ).
The DOJ and the SEC filed charges against Wells Fargo after finding its misconduct related to the “cross-sell” strategy of its largest business unit, the Community Bank.
According to the SEC order, Wells Fargo told investors that the Community Bank’s cross-sell strategy is a “key component of its financial success.” However, the company failed to disclose that its business unit’s sales model has caused widespread unlawful and unethical sales practices between 2002 and 2016.
One of its misconducts was opening millions of accounts of financial products that unauthorized by customers. Wells Fargo’s Community Bank also pressured customers to purchase its products that did not need or would not use.
