Advisory clients’ uninvested dollars were automatically swept into bank accounts that paid paltry interest, but were profitable for the companies, the SEC said.

Merrill Lynch and two Wells Fargo advisory firms have agreed to pay a combined $60 million in civil penalties to settle U.S. Securities and Exchange Commission charges over compliance failures, the regulator said on Friday.

Investment adviser units of Wells Fargo & Co. and Bank of America Corp.’s Merrill shortchanged customers by funneling uninvested cash into sweep accounts that benefited the banks but not their clients,

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Paul McLinko served as the bank’s executive audit director during its 2016 fake-accounts scandal. He called the penalty “arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.

Wells Fargo's profit beat expectations in the fourth quarter, powered by a rebound in dealmaking activity and forecast it would earn more from interest payments this year, sending shares up 6%.

The trio had been previously charged by the OCC in 2020, alongside other former senior leadership of the bank, but had opted not to settle.

Wells Fargo & Co. took a $647 million severance charge in the fourth quarter, as Chief Executive Officer Charlie Scharf continues to whittle headcount as part of broader efforts to slash costs and remake the bank.

Regulators took the wirehouses to task for not having policies directing advisors to consider clients' best interests.

Wells Fargo reported earnings per share of $1.43 for the fourth quarter, beating Wall Street’s consensus estimate of $1.35. A year earlier, the bank reported profit of 86 cents a share. Net interest income,

Oppenheimer analyst Chris Kotowski maintained a Hold rating on Wells Fargo (WFC – Research Report) today. The company’s shares closed yesterday

The U.S. Securities and Exchange Commission (SEC) on Friday said a pair of Wells Fargo Advisory firms and Merrill Lynch have agreed to pay a combined $60 million in civil penalties to settle charges over compliance failures.