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Home News Wells Fargo And Merrill Lynch Settle SEC Compliance Charges For $60 Million

Wells Fargo And Merrill Lynch Settle SEC Compliance Charges For $60 Million

by Celia

Merrill Lynch and two Wells Fargo advisory firms have agreed to pay $60 million in civil penalties to settle charges from the U.S. Securities and Exchange Commission (SEC). The charges stem from compliance failures involving cash sweep programs, according to a statement from the SEC on Friday.

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The SEC said that Wells Fargo and Merrill Lynch failed to implement policies to protect the best interests of their clients when offering cash sweep programs. These programs, which provide bank deposit options for clients’ uninvested cash, were offered without considering alternatives that might have better served clients’ financial needs.

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The firms did not admit or deny the SEC’s findings. Wells Fargo, which is paying $35 million across two firms, said in a statement that the settlement resolves the issue and that the company has taken steps to address the concerns.

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Merrill Lynch, owned by Bank of America, agreed to pay a $25 million fine. A Bank of America spokesperson noted that Merrill Lynch had already made significant efforts to resolve the issue before the SEC investigation began. They added that Merrill Lynch was one of the largest firms to offer a higher cash sweep rate for advisory clients’ uninvested funds.

The settlement brings an end to the investigation, addressing the industry’s broader compliance challenges.

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