(Reuters) — The former head of Wells Fargo & Co’s retail bank agreed to pay a $3 million penalty to settle U.S. Securities and Exchange Commission fraud charges for misleading investors about sales practices used to inflate a performance measures, the SEC said Tuesday.
Carrie Tolstedt was indicted in 2020 for her role in allegedly misleading investors about the success of Wells Fargo’s core business.
Tolstedt agreed in March to plead guilty to obstructing a bank investigation related to the wide-ranging fake account scandal that plagued the bank in 2016 and faces jail time.
In the settlement announced Tuesday, she did not admit or deny the SEC’s allegations.
From mid-2014 to mid-2016, Tolstedt publicly described and supported Wells Fargo’s “cross-selling metric” as a way to measure the bank’s financial success despite it being bloated with accounts and services that were unused, unnecessary, or unauthorized, according to the SEC.
Wells Fargo paid $3 billion in February 2020 to settle federal civil and criminal investigations related to the fake account scandal.
It then admitted that between 2002 and 2016 it pressured employees to meet unrealistic sales targets, leading them to open fake accounts for customers without their knowledge.