NYAG Wells Cross-Sale Disclosure

On Oct. 22, NYAG fined Wells $65mn for misleading cross-sell.

  • Wells Fargo to pay $65mn settlement for misleading investors cross-sell scandal.
  • Follows CFPB, OCC Sep. 2016 $135mn Wells fine re secret accounts.

Cross-Selling Violations

  • Due to strict, unrealistic goals, employees engaged in fraudulent sales practices.
  • Wells Fargo employees opened millions of fake deposit and credit card accounts.
  • Employees were incentivized to meet the targets, with promotions and bonuses.
  • Those who did not meet targets, faced relentless pressure and even termination.
  • Wells did not disclose knowledge of systemic problems pervading sales practices.
  • In 2011, board got reports on increasing numbers of allegations of sales abuses.
  • In Congressional testimony, former CEO said he became aware of fraud in 2013.

Disclosure to Investors

  • Cross-sell is a process, of selling new products or services to existing customers.
  • Wells did not tell the investors, the fraudulent basis for cross-sell business model.
  • When the truth was publicly disclosed, New York investors lost millions of dollars.
  • Represented to investors ability to increase revenues and better serve customers
    by superior cross-sell strategy; reported cross-sell metrics that reflected success.
  • Failed to tell investors, that cross-sell success, built on sales practice misconduct.


  • Bank fined $65mn, and settlement has no impact on other investigation of Wells.
  • NYAG continues to investigate Wells Fargo related to its illegal business practices.