Major U.S. multinational bank Wells Fargo & Company said Friday it has reached a settlement with the federal government worth 3 billion U.S. dollars to resolve the bank’s liabilities for a fake-accounts scandal.
The bank struck agreements with the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) to end a criminal investigation into Wells Fargo’s practice of creating false bank records and more than 2 million phony accounts discovered about four years ago.
Wells Fargo has also reached a civil settlement with the SEC over its fraudulent conduct in connection with the bogus bank accounts created without its customers’ knowledge since 2011.
“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,” said Wells Fargo CEO Charlie Scharf, who took over the bank from former CEO late last year.
“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,” he added.
Under the agreement, Wells Fargo will set up a 500-million-dollar fair fund to compensate investors who were misled and harmed by the bank’s false disclosure.
The DOJ agreed to defer criminal prosecution of Wells Fargo if the bank complies with the terms set out in the settlement in the next three years. Enditem