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Ex-Wells Fargo chief hit with fine for misleading authorities

·1-min read
Former Wells Fargo chief John Stumpf will pay another fine in the bank's fake accounts scandal
Former Wells Fargo chief John Stumpf will pay another fine in the bank's fake accounts scandal

US regulators on Friday charged former Wells Fargo CEO John Stumpf with allegedly misleading investors, hitting him with a $2.5 million penalty.

In the latest development in the long-running scandal at the bank, the SEC said Stumpf and another former executive, Carrie L. Tolstedt, inflated the success of Wells Fargo's Community Bank using objectionable high-pressure sales practices.

The SEC early this year fined Stumpf $17.5 million over the bank's long-running fake accounts scandal, in which Wells Fargo employees opened millions of deposit and credit card accounts without the approval or knowledge of their customers between 2002 to 2016.

According to the SEC's latest complaint, Tolstedt, from mid-2014 through mid-2016, touted the bank's financial success "despite the fact that this metric was inflated by accounts and services that were unused, unneeded, or unauthorized."

In addition, Tolstedt allegedly signed "misleading" documents certifying the accuracy of Wells Fargo's public disclosures, the SEC said in a statement.

Stumpf meanwhile "signed and certified statements filed with the commission, which he should have known were misleading."

The SEC charged Tolstedt with violating the antifraud provisions of securities law, while Stumpf did not admit or deny the complaint but agreed to pay the fine.

The SEC said it will combine this money with $500 million paid by Wells Fargo in a previous settlement and distribute the sum to harmed investors.

hs/cs