By Denny Jacob

The Securities and Exchange Commission settled charges against units within Bank of America and Wells Fargo that will result in $60 million in total civil penalties.

The SEC said the charges were settled against investment advisers Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network as well as Merrill Lynch, Pierce, Fenner & Smith regarding rules related to the firms' cash sweep program.

The regulator's order said the units offered bank deposit sweep programs as the only cash sweep option for most advisory clients and benefited from their advisory clients' cash. The SEC said it found discrepancies with interest rates offered in the program and added that they failed to implement policies and procedures that considered the best interest of clients when selecting cash sweep program options, including during periods of rising interest rates.

"Our agreement with the SEC puts this broader industry matter behind us, and as the settlement states, we have already successfully addressed the issues covered by the resolution," said a Wells Fargo spokesperson.

"As the SEC noted, Merrill took several significant steps before becoming aware of the Commission's investigation, including increasing the rates paid to advisory clients in Merrill's Bank Deposit Program," said a Bank of America spokesperson.

The units charged by the SEC consented to the entry of orders without admitting or denying the SEC's findings. Wells Fargo Clearing Services agreed to pay a civil penalty of $28 million, Wells Fargo Advisors Financial Network agreed to pay $7 million, and Merrill Lynch, Pierce, Fenner & Smith agreed to pay $25 million.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

January 17, 2025 09:48 ET (14:48 GMT)

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