In the Matter of Wells Fargo & Company
Admin. Proc. File No. 3-19704
On February 21, 2020, the Commission instituted and simultaneously settled cease-and-desist proceedings against Wells Fargo & Company (the “Respondent” or “Wells Fargo”). In the Order, the Commission found that from 2012 through 2016, the Respondent violated the federal securities laws by misleading investors regarding the success of the core business strategy of the Community Bank operating segment, its largest business unit. At all relevant times, Wells Fargo was a publicly traded financial services corporation with common stock registered under Section 12(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and quoted on the New York Stock Exchange (Ticker: WFC). According to the Order, Wells Fargo, among other things, failed to disclose to investors that the Community Bank’s sales model had caused widespread unlawful and unethical sales practices misconduct that was at odds with its investor disclosures regarding needs-based selling, and that the publicly reported cross-sell metric included significant numbers of unused or unauthorized accounts. The Commission found that Wells Fargo violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and ordered it to pay a $500 million civil money penalty to the Commission. The Commission also established a Fair Fund (the “Fair Fund”), pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty can be distributed to investors harmed by the Respondent’s conduct described in the Order. See Commission’s Order: Release No. 34-88257.
The Fair Fund consists of the $500 million paid by the Respondent pursuant to the Order. The Fair Fund has been deposited in an interest-bearing account at the United States Treasury’s Bureau of Fiscal Service.
On March 10, 2020, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator for the Fair Fund. See Commission’s Order: Release No. 34-88353.
For more information, please contact the Commission:
Office of Distributions