The Securities and Exchange Commission on Friday charged former Wells Fargo CEO John Stumpf and a top lieutenant with misleading investors about the success of the division at the heart of the bank’s fake-account scandal.
In other words, the former Wells Fargo executive bragged to investors about how many different accounts customers had — despite the fact that millions of these accounts were fabricated by employees trying to meet wildly unrealistic sales goals set by management. Moreover, the SEC said Tolstedt signed off on the accuracy of Wells Fargo’s public disclosures « when she knew or was reckless in not knowing » that statements about the bank’s cross-sell metric were « materially false and misleading. » Tolstedt left Wells Fargo (WFC) at the end of 2016. The SEC is seeking civil penalties against Tolstedt and wants to ban her from becoming an executive officer or sitting on a corporate board. In a statement, Enu Mainigi, a lawyer at Williams & Connolly representing Tolstedt, defended her as an « honest and conscientious » executive. « It is unfair and unfounded for the SEC to point the finger at Ms. Tolstedt when her statements were not only true but also thoroughly vetted by others as part of Wells Fargo’s policies, procedures and systems of controls, » Mainigi said.
