Wells Fargo to Pay $35 Million in SEC Case Tied to ETF Sales
- The penalty will be distributed to harmed investors, SEC says
- Bank agreed to settle without admitting or denying the claims
Photographer: Craig Warga/Bloomberg
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Wells Fargo & Co. agreed to pay $35 million to resolve claims that it failed to police sales of exchange-traded funds to risk-averse clients, the scandal-plagued bank’s latest step toward putting it’s myriad regulatory problems behind it.
Some of the bank’s brokers recommended single-inverse ETF investments to clients including senior citizens and retirees, even though the employees didn’t fully understand the risk of losses when the products are held long-term, the Securities and Exchange Commission said in a Thursday statement. The bank lacked policies and procedures to ensure brokers understood the ETFs and to detect unsuitable recommendations, the SEC said.