Senators Ask for SEC Probe of Wells Fargo

Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...

By Rob Tricchinelli

Sept. 30 — A trio of Democratic senators asked the SEC to investigate whether Wells Fargo's conduct in creating bogus customer accounts violated securities laws.

Wells Fargo's actions justify a Securities and Exchange Commission investigation into “at least three types of securities law violations,” Sens. Robert Menendez (N.J.), Jeff Merkley (Ore.) and Elizabeth Warren (Mass.) said in a Sept. 29 letter to SEC Chairman Mary Jo White.

The agency should look into potential violations of Sarbanes-Oxley prohibitions on inaccurate financial reporting, whether Wells Fargo committed securities fraud in its disclosures and whether any whistle-blower protection laws were violated when the bank fired employees who tried to report misconduct internally.

The SEC declined to comment.

‘Massive, Years-Long Fraud.'

Wells Fargo agreed earlier in September to pay $185 million to the Consumer Financial Protection Bureau and other federal authorities after the company admitted to opening at least a million phony customer accounts.

“The SEC should join in these efforts to ensure that Wells Fargo and its senior executives are held accountable for a massive, years-long fraud that hurt thousands of customers and potentially cost investors billions of dollars,” the senators wrote.

Chief Executive Officer John Stumpf has given up $41 million in compensation and faced grilling during House and Senate hearings.

The state of California also temporarily barred the San Francisco-based bank from underwriting state debt and handling banking transactions.

To contact the reporter on this story: Rob Tricchinelli in Washington at rtricchinelli@bna.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.