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Wells Fargo settlement overview:
- Who: Wells Fargo has reportedly reached a $35 million settlement with the U.S. Securities and Exchange Commission.
- Why: The company allegedly failed to update its billing accounts to reflect reduced fee agreements it had reached with clients, causing them to be overcharged.
- Where: The Wells Fargo settlement was reached with the SEC.
- What are my options: Credit Karma offers banking options like checking and savings accounts and credit cards.
Wells Fargo has reached a $35 million settlement with the U.S. Securities and Exchange Commission (SEC) over allegations it charged excessive advisory fees, Law360 reports.
The SEC recently issued a cease-and-desist order alleging Wells Fargo and its predecessor firms overcharged nearly 11,000 investment advisory accounts more than $26.9 million in advisory fees from 2002 through 2022.
Between 2002 and 2014, certain Wells Fargo investment advisor representatives reportedly agreed to reduce the standard, pre-set advisory fee rate for certain clients when they agreed to open accounts, according to the SEC.
To document the changes to the typical Wells Fargo advisory fees, the representatives made handwritten or typed notes on the standard agreements but failed to ensure the agreed-upon rate was entered into the billing system when they set up the clients’ accounts.
The SEC says Wells Fargo violated the Advisers Act by failing to implement written compliance policies and procedures that would have prevented this type of overbilling.
Wells Fargo advisory fees refunded to affected accounts in 2022, SEC says
According to the cease-and-desist order, Wells Fargo learned about the Wells Fargo advisory fees issue after the Connecticut Department of Banking submitted an inquiry in 2018. Wells Fargo reportedly confirmed that the accounts at issue had been overcharged and reimbursed the accounts.
Other accounts were subsequently discovered to have been overcharged for Wells Fargo advisory fees, the SEC alleges. Despite knowing of the overcharges in Connecticut, Wells Fargo reportedly failed to conduct periodic testing of its accounts to ensure that the advisory fees were accurate.
Wells Fargo continued to overcharge Connecticut accounts until 2019 when it began identifying discrepancies between its agreements with clients and the information in the company’s billing system, the SEC says. In 2022, Wells Fargo developed a process to identify which agreements contained handwritten or typed notations and discovered 10,800 additional accounts that had been subject to Wells Fargo advisory fee overcharges nationwide.
Wells Fargo subsequently corrected the advisory fees and issued $26.3 million in reimbursements plus $13 million to the affected account holders, the SEC notes.
The Wells Fargo settlement with the SEC requires the company to cease and desist from further Advisers Act violations and pay a $35 million penalty to the SEC.
A recent Wells Fargo class action lawsuit alleges the bank allows fraudulent bank accounts to be created and releases customers’ full banking details to the fraudulent account creators.
What do you think about the Wells Fargo settlement with the SEC? Join the discussion in the comments!
The SEC is represented by Tracy W. Lo and BeLinda I. Mathie.
The Wells Fargo advisory fees lawsuit is In the Matter of Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network LLC, File No. 3-21580, before the Securities and Exchange Commission.
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19 thoughts onWells Fargo to pay $35M to settle claims it wrongfully charged advisory fees
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Wells Fargo charged excessive fees , opened unauthorized accounts in which we were involved in class action but never got information on which accounts were opened . Recently found 2 more accounts which were opened which was not authorized by me. Also changed prime equity line of credit terms and added fees and transactions .
I received a letter saying i was included in a class action suit against Wells Fargo-think it is this one. Waiting on a check for two hundred some
I been with wells Fargo over a year ever since I got my account I have multiple money taken from me for unauthorized transactions an I am sick losing my money that get once a month cause I cannot get out make more money I disabled an it has got worse each month and this it be Christmas they took all my money an dont have money to pay f ing bills or live on for mouth or have Christmas if they should be than a law suit fined an jailed for people in the office authorized all transactions all people that have accounts to us as 2000 to our accounts an get part of the lawsuit
Please add me to this class action.
My house is finance through Well Fargo and I get a fees on my statement all the time.