Wells Fargo again charged with misconduct

Wells Fargo is once again accused of misconduct, this time because he would have used complex financial investments to take advantage of family investors.

The Securities and Exchange Commission said Monday that between 2009 and 2013, Wells Fargo (WFC) paid high fees by "unduly encouraging" brokerage clients to actively trade high-rate debt that was to be held to maturity.

Wells Fargo Advisors, the brokerage division of the bank, agreed to pay a penalty of $ 4 million for its product management, called market-related investments. The bank must also report $ 930,377 of ill-gotten gains, plus $ 178,064 in interest.

Wells Fargo, who neither admitted nor denied the SEC's allegations, said in a statement that she had "fully cooperated" with the latest investigation.

Over the last two years, Wells Fargo has been involved in a series of scandals about how the bank treats its account holders, borrowers, and employees.

Although bond-type investments were designed to be held, the SEC said Wells Fargo pushed its customers to sell them before maturity. The bank then ordered its customers to invest the product in new products.

The SEC criticized Wells Fargo for "misconduct" and stated that his advisors "did not reasonably investigate or understand the significant costs of the recommendations." In addition, the agency said that Wells Fargo's supervisors "regularly approved" these transactions despite internal policies that prohibited the "reversal" of these complex products.

Wells Fargo shares simultaneously generated "substantial fees" for the bank and "reduced" returns for investors, the SEC said.

In other words, Wells Fargo has made more money and his customers have lost.

"It's important for brokers to do their homework before recommending to their retail clients to buy or sell complex structured products," said Daniel Michael, an SEC official, in a statement.

Related: Wells Fargo sells all its branches in three states in the US Midwest

In his statement, Wells Fargo stated that he "had previously made policy and supervisory changes related to this issue in order to improve internal controls".

Wells Fargo noted that the SEC has only designated two of its financial advisors as "engaged in a systematic practice of soliciting clients".

Still, this is not the first time that Wells Fargo Advisors finds itself in trouble. Last year, the SEC accused the division of pushing its clients into risky volatility investments that almost guaranteed them to lose money, while telling them that it was not easy to lose money. was a good way to protect their portfolios.

And there has been a series of other scandals that Wells Fargo has struggled to recover. The bank admitted to having opened millions of fake accounts, forcing auto borrowers to pay for insurance they did not need and to charge home buyers for mortgage fees that they did not need. they did not deserve. The regulators fined Wells Fargo $ 1 billion for insurance and mortgage lending.

In February, the Federal Reserve slapped Wells Fargo with unprecedented sanctions for "widespread customer abuse". The sanctions prevent Wells Fargo from growing beyond $ 2 trillion in assets until it cleans up its act. The bank recently said that it expects the Fed's sanctions to remain in place until next year.

CNNMoney (New York) First published on June 25, 2018: 5:50 PM ET