Wells Fargo Reaches Settlements to Resolve Outstanding DOJ and SEC Investigations Related to Historical Community Bank Sales Practices
- Settlement includes agreement with DOJ resolving criminal investigation
Resolution also covers DOJ and
As the settlement agreements with the DOJ recognize,
Today’s resolution includes:
An agreement with the DOJ that resolves the criminal investigation into sales practice activities in the
Community Bankfrom 2002 to 2016. As part of the agreement, no charges will be filed against Wells Fargoprovided Wells Fargoabides by all the terms of the agreement.
- A separate settlement agreement that resolves DOJ’s civil investigation.
And a separate administrative order that resolves the SEC’s civil investigation.
Wells Fargohas agreed to the establishment of a $500 million Fair Fund for thebenefit of investors who were harmed by the conduct covered in the agreement. The Fair Fundis part of the $3 billionsettlement.
Remedial actions taken by company since 2016
These changes include:
Significant leadership changes:
- A new CEO and majority of new members on the Operating Committee, Wells Fargo’s senior-most management committee.
Significant management changes at all levels of the
Community Bank, including senior executives.
- Reconstitution of a majority of the Board’s independent directors (8 new independent directors), including the majority of Board Committee Chairs.
- Elimination of all product-based sales goals that led to this conduct.
- Implementation of a new incentive compensation structure for retail bankers that rewards them based on customer outcomes and requires risk accountability at all levels.
- Enhancement of the Community Bank’s processes for customer consent and stronger oversight and controls.
- Investment of more than 800,000 hours in learning and development for retail bank employees to support cultural, process and policy changes, with training ongoing.
- Reorganization and centralization of key Company functions, including Risk, Human Resources, Finance, Technology, and Data.
Even before today’s establishment of the
Fair Fund, agreement to pay more than $500 millionto customers and investors as remediation for harm that resulted from the historical Community Banksales practices.
John Campbell, 415-396-0523