SEC files Charges Against Former Wells Fargo Executives

Posted on December 1st, 2020 at 4:03 PM
SEC files Charges Against Former Wells Fargo Executives

From the Desk of Jim Eccleston at Eccleston Law LLC:

The U.S. Securities and Exchange Commission (“SEC”) announced that it had filed charges against John G. Stumpf, Wells Fargo’s Former CEO and Chairman, as well as Carrie L. Tolstedt, former head of Wells Fargo’s Community Bank. The charges are based on allegations that Stumpf and Tolstedt misled investors, according to a press release from the SEC. Stumpf has already settled the charges brought by the SEC by agreeing to pay a $2.5 million penalty. The SEC previously settled charges brought against Wells Fargo based on similar misconduct.

According to the SEC, from mid-2014 to mid-2016, Tolstedt publicly endorsed the bank’s “cross-sell metric” as a method to determine the bank’s financial success.  However, the SEC alleged that this metric was inflated “by accounts and serves that were unused, unneeded, or unauthorized.” Tolstedt also signed misleading sub-certifications related to Wells Fargo’s public disclosures despite the fact that Tolstedt knew or was reckless in not knowing that the statements were false, according to the SEC. Tolstedt is charged with violating the antifraud provisions of the federal securities laws, and could face civil penalties, disgorgement and an officer-and-director bar if convicted.

The SEC alleged that in 2015 and 2016, Stumpf certified statements filed with the SEC which he should have known were misleading.  Stumpf’s alleged misconduct also related to Wells Fargo’s cross-sell metric. Stumpf settled the charges without admitting or denying the SEC’s findings.

Tags: eccleston, sec, charges filed, wells fargo

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I just received this letter from the CFP Board. Thank you, Thank you, THANK YOU!

David Y


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