Wells Fargo & Co. has agreed to pay a $35 million penalty to settle allegations that it overcharged more than 10,900 investment advisory accounts, the Securities and Exchange Commission said.
The overcharges at two Wells Fargo units amounted to over $26.8 million in advisory fees, the SEC said in a statement Friday.
Certain financial advisors “agreed to reduce the firms’ standard, pre-set advisory fees for certain clients and made handwritten or typed changes on the clients’ investment advisory agreements that reflected the reduced fees at the time their accounts were opened,” the regulator said in its order.
The bank didn’t admit to or deny the regulator’s allegations.
“We’re pleased to resolve this matter,” Caroline Szyperski, a Wells Fargo spokesperson, said in a statement. “The process that caused this issue was corrected nearly a decade ago. And, as noted in the settlement documents, Wells Fargo Advisors conducted a thorough review of accounts and has fully reimbursed affected customers.”
From 2002 through 2014, the bank and its predecessor firms would occasionally agree to reduce the fees charged to advisory clients at the time they opened accounts, the SEC alleged. These fee cuts were either handwritten or typed onto the firm’s standard investment advisory agreements, but at times they weren’t actually implemented.
As a result, thousands of accounts were overcharged, the regulator claimed. The overcharging continued until last year. In June, Wells Fargo paid the affected accounts $39 million in reimbursed fees with interest.