SEC sues Wells Fargo for violating anti-money laundering rules
The Securities and Exchange Commission on Thursday sued Wells Fargo Bank, alleging that the bank failed to properly investigate and prevent money laundering violations involving more than $1 billion in loans to clients.
The SEC alleges that Wells Fargo violated federal money laundering and counter-money-laundering laws by not investigating suspicious activity involving the bank’s customers.
In a statement, the SEC said that the investigation uncovered suspicious activity, including unauthorized accounts and unauthorized transfers of funds from accounts to a company in Mexico, the use of customer names and identities without authorization, and money laundering transactions involving clients who were not in compliance with federal law.
The commission said the actions taken by Wells Fargo did not prevent the bank from becoming a target of the investigation.
The company was not a party to the lawsuit, which was filed in federal court in Chicago.
In response to the filing, Wells Fargo Chief Executive John Stumpf said that he is disappointed in the SEC’s decision.
“We are confident that the Commission will vigorously defend our company and will vigorously pursue all of the appropriate remedies under the law,” Stumpff said in a statement.
“We will continue to focus on improving our customer experience and protecting our investors.”
The SEC filed a civil lawsuit against Wells Fargo in March alleging that it failed to prevent the illegal transfers of customers’ money from Mexico to a firm in Mexico.
The agency said that Wells had failed to follow the procedures outlined in the Bank Secrecy Act and the Bank Holding Company Act.
The complaint also accused Wells Fargo of failing to comply with the terms of a settlement agreement that was reached with the Justice Department and the Department of Homeland Security.
The settlement, which went into effect in February, required Wells Fargo to monitor its customers and to report suspicious activity to the bank in the U.S. and Mexico.
In May, Wells settled a separate SEC investigation into suspicious activity associated with customer accounts at the bank.
The investigation found that some of the accounts had improper amounts of money.
Wells Fargo said in March that it had suspended some of its customers who were subject to the probe.
The bank also agreed to pay $9.8 million to settle charges that it did not adequately investigate customer transfers of money from a Mexican account to a U.A.E. subsidiary.
The U.N. human rights council called the settlement “a clear indication that all financial institutions, even those with limited risk, must play a proactive role in the fight against money laundering.”