In contrast, Wells Fargo’s leadership is disseminating the message that the government is easing its controls over the company. Just last week, the 2016 Consumer Financial Protection Bureau consent order tied to the fake account scandal expired, the bank reported.
But don’t count on the bank being out of the news any time soon. Later this month, three former high-level Wells Fargo executives facing the possibility of massive financial penalties in connection with the bank’s unauthorized-accounts scandal are scheduled to go on trial.
Short of a last-minute settlement, the administrative law hearing in Sioux Falls, S.D., will be a high-profile dust-up between Wells Fargo executives and regulators who are seeking $19 million from the three former executives. The list of potential trial witnesses includes former Wells Fargo CEOs John Stumpf and Tim Sloan.
Whether the bank and its wealth management, brokerage and insurance businesses will steer clear of future sales violations scrapes remains to be seen. The Securities and Exchange Commission ordered Wells Fargo to pay $35 million in March 2020 to unsuspecting clients harmed by the bank’s failure to supervise advisors and brokers who recommended high risk single-inverse exchange-traded funds to mom-and-pop retail investors “without adequate compliance policies and procedures with respect to the suitability of those recommendations.”
In one of numerous settlements with the company, the Financial Industry Regulatory Authority in 2016 ordered Wells Fargo broker-dealers to pay $3.4 million in restitution for unsuitable sales of volatility-linked exchange-traded products without fully understanding their risks or features. The products are designed to be held for a day and they were marketed as long-term holdings, Finra said.