After Wells Fargo charged its clients exorbitantly for investment advice, it will now pay $40 million to 11,000 of them. This was confirmed by the Securities and Exchange Commission.
However, in addition to distributing this money to clients, Banque Populaire will pay a civil penalty of $35 million. In order to resolve the charges against him in the Securities and Exchange Commission.
Suppose such an agreement was reached in order to somehow put an end to the legal discussions that arose around this issue. However, Wells Fargo did not accept or deny any allegations.
What is certain is that some of the accusations came after several Wells Fargo advisors agreed to lower standard fees for some of their clients. All this for the advisory service after opening their bank accounts.
In this sense, the bank’s internal regulations did not take into account the low prices of the aforementioned advisory services. So it charged customers by approving automatic charging of more than 10,945 bank accounts.
What will happen now?
Wells Fargo will now have to pay about $40 million in refunds to customers who were overcharged. Therefore, the payment of excess commissions will be included in addition to interest, which will result in approximately $26.8 million.
Meanwhile, Gurbir Grewal, the SEC’s Chief Compliance Officer, issued a written statement to CNBC.
“For years, Wells Fargo and its predecessors negotiated lower consulting fees with thousands of clients, but failed to deliver,” the official said.
By contrast, Wells Fargo spokeswoman Carolyn Szybirski said the company was “delighted to have resolved this matter”.
A spokeswoman for the Banque Populaire also stated that nearly a decade ago the process that caused the problem was corrected. He also noted that, as the settlement documents show, Wells Fargo Advisors conducted a comprehensive audit. Therefore, it made a full refund to the affected customers.