Carrie Tolstedt, the former head of Wells Fargo’s Community Bank, has agreed to pay $3 million to settle charges that she misled investors about the bank’s sales practices.
The Securities and Exchange Commission (SEC) alleged that Tolstedt, who retired from Wells Fargo in 2016, created a sales culture that encouraged employees to open unauthorized accounts in order to meet sales goals. The SEC also alleged that Tolstedt knew about the fraudulent sales practices but failed to take steps to stop them.
As part of the settlement, Tolstedt has agreed to pay a $3 million penalty and to be barred from serving as an officer or director of a public company for five years. She has also agreed to cooperate with the SEC’s investigation.
“This settlement holds Carrie Tolstedt accountable for her role in creating a sales culture that led to widespread fraud at Wells Fargo,” said Stephanie Avakian, Co-Director of the SEC’s Enforcement Division. “Tolstedt knew about the fraudulent sales practices but failed to take steps to stop them. This settlement sends a clear message that those who violate the law will be held accountable.”
The SEC’s investigation is ongoing.
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