Wells Fargo Reaches $3 Billion Settlement with DOJ, SEC

Wells Fargo admits its fake-accounts scandal was ‘reprehensible,’ sets aside fund for investors.
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Wells Fargo  (WFC) - Get Report said late Friday it will pay $3 billion to settle investigations by the Securities and Exchange Commission and the Justice Department into its fake-accounts scandal.

The San Francisco-based bank admitted that employees opened checking and savings accounts customers didn’t want or ask for, and that it collected millions in fees as as a result.

Charlie Scharf, chief executive officer, said in a statement, “The conduct at the core of today’s settlements — and the past culture that gave rise to it — are reprehensible and wholly inconsistent with the values on which Wells Fargo was built. Our customers, shareholders and employees deserved more from the leadership of this company.”

Shares of Wells Fargo added 1.6% in late trade, after the announcement, which had been expected following press reports Thursday that a deal was close. Shares closed at $47.70 in regular trade Friday.

Scharf’s statement also said: “While today’s announcement is a significant step in bringing this chapter to a close, there’s still more work we must do to rebuild the trust we lost. We are committing all necessary resources to ensure that nothing like this happens again, while also driving Wells Fargo forward.”

As part of the agreement, no charges will be filed. The company said separate settlement end civil investigations by the DOJ and SEC.

The settlement amount includes $500 million for "investors who were harmed by the conduct covered in the agreement," the bank said. 

Wells Fargo said in the statement that it had fully accrued for the amount of the settlement as of Dec. 31.