Friday former Wells Fargo CEO John Stumpf and former retail banking head Carrie Tolstedt were both charged with misleading investors about the company’s sales practices, according to a press release.
The Securities and Exchange Commission charged the former executives with “allegedly misleading investors about the success of the Community Bank, Wells Fargo’s core business,” according to a press release.
Stumpf is prepared to settle the charges and pay a $2.5 million penalty, however, the SEC is set to litigate the fraud charges against Tolstedt in court, according to Reuters. (RELATED: CFPB Smacked Wells Fargo With A $1 Billion Fine)
“In 2015 and 2016 [Stumpf] signed and certified statements filed with the Commission, which he should have known were misleading, regarding both Wells Fargo’s Community Bank cross-sell strategy and its reported metric,” according to the SEC press release.
The SEC asserts that “from mid-2014 through mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s ‘cross-sell metric’ as a means