By Alice Seeley
On May 20, the Securities and Exchange Commission announced charges against Wells Fargo Advisors for failing to file at least 34 suspicious activity reports in a timely manner between April 2017 and October 2021.
These incidents occurred because Well Fargo Advisors failed to properly implement and test a new version of its internal anti-money laundering transaction monitoring and alert system adopted in January 2019. The alert system failed to reconcile the different country codes used to monitor foreign wire transfers. This resulted in the broker not filing at least 25 suspicious activity reports in a timely manner.
These reports concerned suspicious transactions in customers’ accounts involving wire transfers to or from foreign countries, such as Costa Rica, Turkey, Honduras, the British Virgin Islands, Antigua, Cayman Islands, Ukraine, and Guernsey. These transactions were determined to be at risk of facilitating “money laundering, terrorist financing, or other illegal money movements,” the SEC said.
In addition, Wells Fargo Advisors failed to process wire transfer data appropriately and file at least nine other suspicious activity reports starting in April 2017.
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said Wells Fargo Advisors “put the investing public at risk because they deprive regulators of timely information about possible money laundering, terrorist financing, or other illegal money movements.”
Wells Fargo Advisors spokeswoman Shea Leordeanu responded to these accusations, saying, “At Wells Fargo Advisors, we take regulatory responsibilities seriously. This matter refers to legacy issues that impacted a transaction monitoring system, and the issues were resolved promptly upon discovery.”
Wells Fargo Advisors agreed to pay $7 million without admitting or denying the SEC’s findings to settle these charges of anti-money laundering-related violations. The company has agreed to a censure and a cease and desist order.
This is the newest charge to Wells Fargo Advisors’ history of alleged improprieties. In 2016, Wells Fargo paid $185 million in fines after it was discovered the bank opened more than 1.5 million checking and savings accounts and 500,000 credit card accounts without customers’ consent. Three years later, the Wall Street Journal exposed further misconduct by Wells Fargo, writing that “nearly every one of its business lines is under investigation by a government agency, including the Justice Department and the Securities and Exchange Commission.”
This week, Wells Fargo was found guilty of conducting job interviews to satisfy diversity hiring quotas, even when the job had already been offered to another candidate.