Wells Fargo on Friday agreed to pay $3 billion in a criminal and civil settlement with the Securities and Exchange Commission and the Department of Justice related to its fake accounts scandal.
The bank has been mired in legal trouble for years following the revelations that it created millions of fraudulent checking and savings accounts on behalf of its clients without their consent. It was not until reports about workers being pressured into creating the accounts that the fraud was uncovered, leading to an investigation and fine by the Consumer Financial Protection Bureau in 2016.
Investigators further alleged that the bank misled investors by boasting about the number of accounts opened by customers, when many of the accounts were not real.
“Wells Fargo repeatedly misled investors, including through a misleading performance metric, about what it claimed to be the cornerstone of its Community Bank business model and its ability to grow revenue and earnings,” said Stephanie Avakian, co-director of the SEC’s Division of Enforcement. “This settlement holds Wells Fargo responsible for its fraud and furthers the SEC’s goal of returning funds to harmed investors.”
The scandal brought down CEO John Stumpf in 2016. Last year, a second CEO of the bank, Tim Sloan, also resigned.
Friday’s announcement of the settlement the bank will pay to the SEC and Department of Justice will end their investigations into the bank.
“This settlement holds Wells Fargo accountable for tolerating fraudulent conduct that is remarkable both for its duration and scope, and for its blatant disregard of customer’s private information,” said Michael Granston, deputy assistant attorney general at the DOJ’s Civil Division, in a prepared statement.
