The Federal Reserve and the U.S. Treasury Department on Thursday fined Wells Fargo & Co. a combined $97.8 million for “deficient oversight” that allowed the bank to allegedly skirt U.S. sanctions regulations. It is the latest in a series of enforcement actions against the megabank.
The bank’s Wells Fargo Bank N.A. unit violated U.S. sanctions by providing a trade-finance platform called Eximbills to an unnamed foreign bank, which used the platform to process $532 million in prohibited transactions between 2010 and 2015, according to a statement from the Fed.
“Wells Fargo is pleased to resolve this legacy matter involving conduct that ended in 2015, which we voluntarily self-reported and fully cooperated with the Office of Foreign Assets Control and the Federal Reserve Board to address,” said an emailed statement from a Wells Fargo spokesperson.
Wells Fargo’s
WFC,
stock fell 1.8% on Thursday afternoon, to not far from its level prior to the enforcement action.
The Fed’s fine of $67.8 million — included in the $97.8 million total — is for “unsafe or unsound practices” related to historical inadequate oversight of sanctions-compliance risk by Wells Fargo Bank N.A.
The Fed did credit Wells Fargo with identifying the issue on its own and preventing the unnamed foreign bank from processing transactions involving parties in jurisdictions with sanctions, according to the complaint.
The bank “no longer offers the trading platform to foreign banks, and reported the matter to relevant regulators,” the Fed said in its complaint. The Fed also said the bank has fixed the problem and strengthened firmwide compliance and has “fully cooperated” with the the central bank.
The fine is the latest of several enforcement actions against the bank, including a $1.93 trillion asset cap the Fed placed on it in 2018.
Wells Fargo’s stock is down nearly 10% in 2023, compared with a 5% gain by the S&P 500
SPX,
Also read: CFPB’s allegations against Wells Fargo: illegal fees, wrongful car repos and misapplied payments
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