Wells Fargo has restituted $40 million to nearly 11,000 customers following revelations of overcharged fees for investment advice spanning several years, as confirmed by the Securities and Exchange Commission (SEC) on Friday. In addition to the reimbursement, the bank has agreed to pay a $35 million civil penalty to settle the charges presented by the SEC. Despite this, Wells Fargo has neither confessed nor refuted the allegations put forth by the agency. The issue revolves around specific Wells Fargo financial advisors, including those from legacy entities resulting from a merger. These advisors agreed to decrease standard advisory fees for some clients upon opening their accounts. Yet, internal systems encountered failures in recognizing these fee reductions in certain cases, leading to the overcharging of 10,945 accounts established prior to 2014. This miscalculation persisted for numerous years until the end of December of the previous year, according to the SEC’s findings. The total $40 million reimbursement offered by the bank to the impacted customers encompasses more than $26.8 million in surplus fees, along with interest.

The SEC has highlighted that neither Wells Fargo nor its predecessor firms, AG Edwards and Wachovia, implemented written protocols to prevent this inadvertent overbilling. The amalgamation of AG Edwards and Wachovia in 2007, followed by the merger of Wells Fargo and Wachovia in 2008, didn’t result in the establishment of effective procedures to avert such incidents. Gurbir Grewal, head of the SEC’s enforcement division, underscored, “For years, Wells Fargo and its predecessor firms negotiated reduced advisory fees with thousands of clients, but failed to honor them.” In response, Caroline Szyperski, spokesperson for Wells Fargo, expressed satisfaction in resolving the issue and stressed that the problem-causing process was rectified nearly a decade ago. She added, “As noted in the settlement documents, Wells Fargo Advisors conducted a thorough review of accounts and has fully reimbursed affected customers.”