Wells Fargo to pay $65M settlement related to faulty sales practices

CHARLOTTE, N.C. — Wells Fargo & Co. agreed to pay a $65 million settlement on Monday for fraudulent statements to investors.

The penalty stems from Wells Fargo’s cross-selling business, in which employees sell new products or services to existing customers. New York Attorney General Barbara Underwood says the bank failed to disclose to investors that its strong cross-selling efforts were driven by fraudulent sales practices, such as opening millions of fake deposit and credit card accounts without customers’ knowledge.

Employees who met sales requirements were eligible for promotions and bonuses, while those who did not faced possible termination.

“The misconduct at Wells Fargo was widespread across the bank and at every level of management — impacting both customers and investors who were misled,” Underwood says. She notes the bank became aware of the fraudulent practices as early as 2011, but did not disclose the information to investors. When news of those practices broke publicly, New York investors lost millions of dollars, she says.

Read the full story, including Wells Fargo's response, here: http://bizj.us/1pqihs

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