American bank Wells Fargo & Co. undertakes to pay $500 million to settle a dispute with the U.S. Securities and Exchange Commission (SEC), which has been sued for misleading investors because of the performance of one of the bank's divisions. According to reports, Wells Fargo has violated the Securities Trading Act 1934. The fine, which will be paid out, will be distributed among investors.
According to the report of the regulator, in 2012-2016 the bank reported on the achievements of its subsidiary, Community Bank, which in turn reported on the success of its strategy "cross-sell" (sale of additional services and products to its customers). According to the U.S. SEC, the bank was increasing its performance, opening fictitious accounts and forcing customers to buy services that they did not use. It is noted that the bank opened millions of such accounts. The $500 million fine is part of the SEC and US Department of Justice claims settlement. In addition, Wells Fargo has to pay a $3 billion fine to settle the claims of the authorities, before making a deal with the U.S. Department of Justice and the Securities and Markets Commission. Based on this deal, the Justice Department agreed not to press criminal charges for violations committed by the bank.