Topline
Wells Fargo agreed to pay $145 million to end a Department of Labor investigation into alleged malpractice with employees’ 401(k) retirement accounts Monday, in the latest major penalty for Wells Fargo, though the bank denies wrongdoing.
People walk past a Wells Fargo Bank branch in New York in July.
Key Facts
The Department of Labor said Monday its investigation revealed current and former Wells Fargo employees overpaid for the company’s stock in their 401(k) accounts between 2013 and 2018.
The company and the federal government announced Monday that Wells Fargo will pay about $131.8 million directly to affected individuals and an about $13.2 million penalty to the Department of Labor.
Wells Fargo said in a release it “strongly disagrees with the DOL’s allegations and believes it followed applicable laws in conducting the transactions,” though it noted it felt resolution via settlement was in the company’s best interest.
Wells Fargo disclosed the federal investigation into its 401(k) practices in February, and the company’s stock rose .6% in Monday morning trading, in line with a broader market rise.
Key Background
In February 2020, Wells Fargo agreed to pay $3 billion to federal regulators to settle all criminal and civil cases related to the bank opening millions of accounts for customers without their knowledge or permissions between 2002 and 2016. John Stumpf, who served as Wells Fargo CEO from 2007 to 2016, was banned from working at a bank again by the federal government for his role in the scandal, and he agreed to pay a $2.5 million fine to the Securities and Exchange Commission in November 2020. The Office of the Comptroller of the Currency fined Wells Fargo $250 million in September 2021 for failing to meet its repayment requirements. In April, Wells Fargo agreed to pay $32.5 million to settle a class action lawsuit where 401(k) participants alleged the company mismanaged the fund.
Further Reading
The Price of Wells Fargo’s Fake Account Scandal Grows by $3 Billion (New York Times)
Wells Fargo Admits To More Unauthorized Accounts, Increasing Tally To 3.5 Million (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2022/09/12/wells-fargo-shells-out-145-million-to-end-feds-401k-investigation/