Wells Fargo former boss charged with misleading investors


US financial regulators have accused the former boss of Wells Fargo bank and another former executive with misleading investors in the latest charges to arise from the bank’s fake account scandal.

The Securities and Exchange Commission said the bank leaders endorsed and disclosed sales metrics they should have known were false.

Ex-chief John Stumpf agreed to pay $2.5m (£1.9m) to settle the charges.

He did not admit or deny the claims.

Carrie Tolstedt, the former head of Wells Fargo’s community banking operation, is fighting the fraud claims in court.

Wells Fargo has been under the scrutiny of regulators since 2016, when it was revealed the firm had boosted its sales by opening millions of accounts without authorisation.

This year it paid $3bn to settle an investigation by the US Department of Justice and SEC. It remains under government monitoring and is also subject to an order by the Federal Reserve that limits its growth.

The scandal has led to the departure of two Wells Fargo leaders, including Mr Stumpf, who stepped down in 2016.

Earlier this year, he agreed to pay $17.5m to settle charges tied to the scandal, marking a rare example of a bank executive being personally punished for failing to stop misconduct. The Office of the Comptroller of Currency, a US banking regulator, also barred him for life from the banking industry

Ms Tolstedt is facing a $25m fine in a related case, which she is also fighting in court.

“If executives speak about a key performance metric to promote their business, they must do so fully and accurately,” said the SEC’s director of enforcement Stephanie Avakian, when speaking about the latest charges.

“The Commission will continue to hold responsible not only the senior executives who make false and misleading statements but also those who certify to the accuracy of misleading statements despite warnings to the contrary.”

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