The U.S. SEC imposed a $60 million civil penalty on Wells Fargo and Merrill for settlement allegations

ChainCatcher news, according to official news, the U.S. Securities and Exchange Commission has announced that it has filed settlement charges against Wells Fargo and Merrill for violations related to their cash clearing plans.

The two companies have agreed to pay a total of $60 million in civil penalties. The reason for the settlement charges is their failure to adopt and implement reasonably designed written policies and procedures to prevent violations of the Investment Advisers Act and its related rules concerning the companies' cash clearing plans.

According to the SEC's order, Wells Fargo Advisors and Merrill Lynch provided a Bank Deposit Sweep Program (BDSP) as the only cash clearing option for most advisory clients and derived significant economic benefits from the cash of advisory clients 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 differential between the BDSP and other cash clearing alternatives sometimes grew to nearly 4%.