SEC settles charges against Wells Fargo and Merrill Lynch, imposes $60 million civil penalty

Odaily Planet Daily News According to official news, the U.S. Securities and Exchange Commission issued an announcement that it has filed settlement charges against Wells Fargo and Merrill Lynch for violations in cash settlement plans. The two companies agreed to pay a total of $60 million in civil penalties. The settlement charges were filed because they failed to adopt and implement reasonably designed written policies and procedures to prevent violations of the Advisers Act and its rules related to the company's cash settlement plan. According to the order of the U.S. SEC, Wells Fargo Advisors and Merrill Lynch offer the Bank Deposit Settlement Plan (BDSP) as the only cash settlement option for most advisory clients and have reaped huge economic benefits from the advisory clients' cash in the BDSP. The two companies and their affiliates set the interest rates offered in the BDSP, and during periods of rising interest rates, the yield difference between the BDSP and other cash settlement alternatives sometimes grows to nearly 4%.