(Reuters) - Wells Fargo & Co will pay more than $6.5 million to settle civil charges alleging it sold complex mortgage-backed instruments to municipalities and non-profits during the financial crisis without fully disclosing the risks.
The case marks the latest effort by the Securities and Exchange Commission to hold banks accountable for their actions during the crisis.
The SEC said that Wells Fargo's brokerage unit based in Minneapolis agreed to settle the case without admitting or denying the charges. It will pay a $6.5 million penalty, plus $65,000 in disgorgement and more than $16,000 in prejudgment interest.
The money will go into a fair fund to help harmed investors.
In addition to charging the company, the SEC also charged a former Wells Fargo vice president, Shawn Patrick McMurtry, 42, for his role in selling the products. He settled the charges without admitting or denying them. He will pay a $25,000 penalty and will also be suspended from the industry for six months.
"These issues occurred more than five years ago and pertain to a part of the firm that was completely revamped after the merger with Wachovia. We are pleased to put this matter behind us," said Wells Fargo spokeswoman Elise Wilkinson.