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Wells Fargo’s Penalty Didn’t Get SEC’s Full Support

Feb. 24, 2020, 6:38 PM

The SEC’s commissioners were divided over a penalty they gave to Wells Fargo & Co. as part of the bank’s $3 billion settlement to resolve federal probes into abuses against customers, according to agency records.

Hester Peirce, a Republican on the Securities and Exchange Commission, opposed the $500 million the SEC directed Wells Fargo to pay in connection with the bank’s deal with the agency and the Justice Department on Feb. 21. But she ultimately approved the SEC’s order, which laid out the commission’s allegations against Wells Fargo and included a requirement that it cease and desist from future securities fraud.

Peirce was the only one of the SEC’s four commissioners to register any dissent to the agency’s action against Wells Fargo.

She didn’t immediately respond to a request for comment Monday.

Past Dissent

Voicing at least some opposition to SEC enforcement actions is nothing new for Peirce. She regularly votes against penalties in the commission’s settlements, often standing alone in her disapproval.

Bloomberg Law reported in 2018 she opposed more enforcement actions in part or in full than her fellow commissioners. Peirce said at the time “some” of her penalty votes stem from “a belief that you shouldn’t punish shareholders who’ve already suffered from wrongdoing by imposing a corporate penalty on them.”

Wells Fargo’s agreement came after federal authorities concluded the bank had very aggressive sales targets that led to the creation of fake customer accounts and other misdeeds, including misleading investors.

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bloomberglaw.com

To contact the editors responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com; Seth Stern at sstern@bloomberglaw.com

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