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Wells Fargo ex-CEO and former top executive misled investors, says SEC
[SAN FRANCISCO] Former Wells Fargo & Co chief executive officer John Stumpf and ex-top executive Carrie Tolstedt harmed shareholders by signing off on misleading statements about the success of the community banking business, the US Securities and Exchange Commission (SEC) said.
Mr Stumpf, who retired in 2016 after the bank's deceptions came to light, agreed to pay a US$2.5 million fine to settle the allegations, the SEC said in a Friday statement.
He and Ms Tolstedt, who didn't reach a settlement of the claims against her, knew or should have known that statements they signed attesting to the success of the bank's "cross-sell metric" were false or misleading, the regulator said. Ms Tolstedt also left the bank in 2016.
"If executives speak about a key performance metric to promote their business, they must do so fully and accurately," SEC enforcement director Stephanie Avakian said in the agency's statement.
The SEC is seeking fines, disgorgement and a ban on serving as an officer or director of a public company against Ms Tolstedt.
Mr Stumpf agreed to settle the agency's claims without admitting or denying wrongdoing. His US$2.5 million fine will be pooled with US$500 million collected from an earlier settlement with the bank in a fund for harmed investors, the SEC said.
An attorney for Mr Stumpf declined to comment. Ms Tolstedt's lawyer, Enu Mainigi of Williams & Connolly, said her client "acted appropriately, transparently and in good faith at all times".
"We look forward to setting the record straight and clearing her name," Ms Mainigi said in an email statement.
Wells Fargo earlier this year agreed to pay US$3 billion - including US$500 million to the SEC - to settle US investigations into more than a decade of widespread consumer abuses under a deal that let the bank avoid criminal charges.
The San Francisco-based lender had previously paid more than US$1 billion to US regulators over consumer mistreatment, US$575 million to 50 states and the District of Columbia and US$480 million in an investor class-action lawsuit.