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Home / Business / The SEC accused the former CEO and executive of Wells Fargo of misleading investors due to the success of its core business

The SEC accused the former CEO and executive of Wells Fargo of misleading investors due to the success of its core business



John Staopf Wells Fargo U.S. Senate Hearing
John Stumpf, former CEO and Chairman of Wells Fargo Bank.

  • The Securities and Exchange Commission (Securities and Exchange Commission) on Friday accused John Stumpf, the former CEO of Wells Fargo, along with another executive, of deliberately misleading investors in the core business of Bank of America.
  • It is said that former community bank president Carrie Tolsted (Carrie Tolsted) knew that a key sales metric was exaggerated, but used it as a measure of success anyway.
  • The regulator said that Stumpf signed and certified documents with the SEC in 201
    5 and 2016, when he should have known that the documents were misleading.
  • The former CEO has agreed to pay a fine of $2.5 million, and regulators will file fraud charges against Tolstoy in court.
  • Visit Business Insider’s homepage for more stories.

Friday’s documents show that the US Securities and Exchange Commission has accused John Stumpf, the former CEO of Wells Fargo, of misleading investors regarding the success of its core business.

Carrie Tolsted, the former head of the community bank, was also charged with the same. From mid-2014 to mid-2016, Tolsted reportedly touted the bank’s main sales indicators as a measure of success. The SEC stated that the indicator was actually fraudulent and false based on “unused, unwanted or unauthorized” accounts and services.

The regulator said that Tolstoy signed misleading documents about the bank, “when she knew or recklessly did not know that the statements about the Wells Fargo cross-selling indicators in these disclosures were essentially false and misleading.” .

The US Securities and Exchange Commission said that former CEO Steamp signed and certified documents with regulators in 2015 and 2016, and he should have realized that these documents were misleading.

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The SEC said: “According to the order, Stumpf failed to ensure the accuracy of its certificate after being informed that Wells Fargo misled the public on cross-selling indicators.”

In response to the latest allegations, Wells Fargo reiterated its previous statement that at the time of the sale, the bank did not have “appropriate personnel, structure, processes, controls or culture to prevent improper behavior.”

Stumpf agreed to pay a fine of $2.5 million to settle the agency’s allegations, and the regulator will file fraud charges against Tolstoy in court.

SEC Executive Director Stephanie Avakian (Stephanie Avakian) said in a statement: “If executives talk about key performance indicators that promote their business, then they must be comprehensive and accurate.” “The committee will continue. Not only are they responsible for the senior management who made false and misleading statements, but even if the warning is contrary to the warning, they will also be responsible for the person who proves the accuracy of the misleading statement.”

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