Wells Fargo & Others Fined $549M for Communication Failures
US regulators have imposed a significant penalty of $500 million on Wells Fargo and an additional group of 10 companies due to widespread issues with maintaining proper records.
The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly announced fines totaling $549 million against various firms, including Wells Fargo, Bank of Montreal, BMO Capital Markets Corp, BNP Paribas, Société Générale, Wedbush Securities, Houlihan Lokey Capital, Moelis & Company, SMBC Nikko Securities America, Mizuho Securities, and SG Americas Securities.
According to the SEC, these companies and their employees failed to adequately manage electronic communications, leading to violations of securities laws.
The regulatory investigation uncovered instances of unofficial communications among employees via platforms such as iMessage, WhatsApp, and Signal, all related to their respective companies’ business matters.
Significantly, a large portion of these communications were not properly recorded, which directly contradicts federal securities laws, as per the findings of the SEC.
The companies involved have admitted to violating record-keeping provisions of federal securities laws and have agreed to collectively pay penalties amounting to $289 million. They have also begun enhancing their compliance policies and procedures to rectify these shortcomings.
Similar charges were brought by the CFTC against BNP Paribas, Société Générale, Wells Fargo, and Bank of Montreal, resulting in individual fines of $75 million, $75 million, $75 million, and $35 million, respectively.
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Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the vital importance of adhering to federal securities laws’ bookkeeping requirements for safeguarding investors and ensuring the stability of markets.
He noted that the Commission has already taken 30 enforcement actions, totaling penalties of over $1.5 billion, to underscore this fundamental message. Grewal urged non-compliant firms to take proactive steps, including self-reporting, cooperating, and implementing corrective measures.
This incident reflects a growing trend of significant fines being imposed on traditional financial institutions. Just last month, Credit Suisse was penalized with a fine exceeding $250 million due to its association with investor Bill Hwang, who incurred substantial losses due to excessive leverage and unwise trading decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
