A note on this series
The five major U.S. wirehouses — Wells Fargo, Goldman Sachs, Morgan Stanley, Merrill Lynch, and JPMorgan Chase — all market themselves as fiduciary-minded, client-first institutions. Their regulatory records, all of which sit in public databases at the SEC, DOJ, CFPB, OCC, FINRA, and the Federal Reserve, tell a different story.
This series walks through that record one firm at a time. Each installment cites primary sources only — original press releases, consent orders, court filings — never journalism summaries. The argument is structural, not personal: when an institution is built around a broker-dealer with proprietary product economics and asset-gathering quotas, the regulatory output is the predictable consequence of the structure, not the failure of it.
We start with Wells Fargo. The timing is notable. On March 5, 2026, the Federal Reserve terminated its 2018 enforcement action against the bank — the formal closure of an eight-year regulatory chapter that began with the 2016 fake-accounts scandal.1 The bank has signaled that its remediation work is complete. The public record, particularly on the wealth-management side, suggests the closing is partial at best.
Why this matters for an HNW reader
Most "advisors" at the major wirehouses, including Wells Fargo Advisors, are dual-registered: they hold both an Investment Adviser Representative license and a broker-dealer registered representative license. When they execute a trade in a brokerage account, they operate under FINRA and the SEC's Regulation Best Interest — a "best interest" standard that permits significant conflicts of interest provided those conflicts are disclosed.2 When they provide advice in an advisory account, they operate under the Investment Advisers Act of 1940's fiduciary standard.3
Most clients do not know which hat is being worn at any given moment. The dual-registration model is profitable precisely because it lets a firm capture both fee revenue and product revenue from the same relationship.
That structural distinction is not theoretical. It shapes what is allowed, what gets sold, and what shows up in the enforcement record. The wealth-management actions below are not isolated incidents. They are the predictable output of a business model.
The wealth-management record
January 2025: Cash sweep failures — Wells Fargo Advisors and Merrill Lynch
In an action that is unusually clarifying, the SEC charged two affiliates of Wells Fargo Advisors — Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network LLC — together with Merrill Lynch, in a single coordinated proceeding.4 The firms agreed to pay $60 million in combined civil penalties. Wells Fargo Clearing Services paid $28 million; Wells Fargo Advisors Financial Network paid $7 million; Merrill Lynch paid $25 million.
The charge: as registered investment advisers, they failed to adopt and implement reasonably designed policies and procedures to consider clients' best interests when selecting cash sweep options for advisory accounts. According to the SEC's order, the firms offered bank deposit sweep programs as the only cash sweep option for most advisory clients. The firms or their affiliates set the interest rates on those sweeps. During periods of rising interest rates, the yield differential between the bank deposit sweep and other cash alternatives "at times grew to almost 4 percent."4
Translated: an advisory client was paying an advisory fee on cash that was earning roughly four percentage points less than it could have, while the firm or its affiliate captured the spread. The SEC's framing of the violation is direct: cash sweep programs "impact nearly all advisory clients, who often pay advisory fees on assets held in these accounts."4
Same enforcement, same problem at both firms. The structural argument writes itself.
August 2023: Excessive advisory fees
The SEC charged Wells Fargo Advisors and several predecessor firms with overcharging thousands of advisory clients millions of dollars by failing to honor negotiated reduced advisory fee rates.5 Financial advisors had agreed to reduce the firms' standard advisory fees for certain clients and recorded those reductions in handwritten or typed notations on client paperwork. Those reductions were not consistently entered into the firms' billing systems. Clients paid the higher standard rate they had been told they would not pay.
Wells Fargo paid a $35 million civil penalty.
May 2022: Anti-money laundering reporting failures
The SEC charged Wells Fargo Advisors with failing to file at least 34 Suspicious Activity Reports in a timely manner between April 2017 and October 2021.6 Some reports were filed 1,209 days late. Wells Fargo Advisors paid $7 million.
The wire transfers that should have prompted reports ranged from $10,480 to $6.2 million and were sent to jurisdictions identified as high or moderate money-laundering risk, including the Cayman Islands, the British Virgin Islands, and Antigua. The firm had previously settled a similar case for $3.5 million in 2017.6
May 2025: Customer information lapses tied to departing brokers
FINRA censured and fined Wells Fargo Advisors $150,000 over its failure to safeguard customer information when brokers left the firm.7 Between 2014 and 2022, approximately 241 departing Wells Fargo brokers retained the ability to view non-public information of approximately 1,624 of their former customers — including names, addresses, and Social Security numbers — through their continued access at third-party variable annuity insurance carriers.
The fine is small. The eight-year window during which the lapse persisted is not.
The broader bank record
The wealth-management actions above sit inside a much larger institutional pattern. The pattern is the point.
September 2016: Fake accounts
The Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the City and County of Los Angeles announced coordinated consent orders requiring Wells Fargo to pay $185 million in civil penalties.8 The CFPB's order assessed a $100 million fine; the OCC assessed $35 million; Los Angeles received $50 million. The bank's own analysis at the time identified more than two million unauthorized deposit and credit card accounts. That figure later grew to roughly 3.5 million.
Spurred by sales targets and compensation incentives, employees opened deposit and credit card accounts without customer authorization, transferred funds from authorized accounts to fund the unauthorized ones, and enrolled customers in online banking services they had not requested.8 The conduct dated to at least 2002.
February 2018: The Federal Reserve asset cap
In an unprecedented action, the Federal Reserve restricted Wells Fargo from growing beyond its total asset size as of year-end 2017 — approximately $1.95 trillion — until the bank demonstrated improved governance and risk management.9 The Fed's announcement framed the action as a response to "widespread consumer abuses and compliance breakdowns." It was the first time the Fed had imposed an asset cap on a major U.S. bank.
April 2018: Auto insurance and mortgage rate-lock
The CFPB and OCC announced a coordinated $1 billion settlement.10 The CFPB found that Wells Fargo had violated the Consumer Financial Protection Act in administering a mandatory insurance program tied to its auto loans, and in how it charged certain borrowers for mortgage interest rate-lock extensions. The CFPB assessed a $1 billion penalty; $500 million of that was credited against the OCC's separate fine.
February 2020: Department of Justice and SEC
Wells Fargo and its subsidiary Wells Fargo Bank, N.A. agreed to pay a combined $3 billion to resolve criminal and civil investigations by the Department of Justice and the Securities and Exchange Commission.11 The bank entered a three-year deferred prosecution agreement with the DOJ in which it admitted to two criminal violations: creating false bank records and identity theft. The conduct, per the DOJ, ran from 2002 to 2016.
The DOJ's stated rationale for the agreement referenced "the staggering size, scope and duration of Wells Fargo's illicit conduct, which spanned well over a decade."11 The SEC simultaneously settled charges that the bank had misled investors about the success of its retail banking strategy. $500 million of the $3 billion was placed in a Fair Fund for the benefit of harmed investors.
December 2022: $3.7 billion CFPB order
In what the CFPB called the largest action in its history at the time, Wells Fargo was ordered to pay more than $2 billion in redress to over 16 million affected consumer accounts and a $1.7 billion civil penalty.12 The order covered illegal conduct across deposit accounts, auto loans, and mortgages — including unfairly assessed fees, wrongful repossessions of customers' vehicles, misapplied loan payments, and surprise overdraft fees on debit and ATM transactions even when consumers had sufficient funds to cover the transactions at the time of authorization.
June 2025: Asset cap removed
The Federal Reserve announced that Wells Fargo had met the conditions for removal of the 2018 asset growth restriction.13 The cap had been in place for seven years.
March 2026: Enforcement action terminated
The Federal Reserve terminated the 2018 enforcement action in full, citing completion of two third-party reviews and the bank's remediation work, which the Fed noted "spanned nearly a decade."1
What the pattern shows
In aggregate, between 2016 and 2026, Wells Fargo and its affiliates paid more than $8 billion in penalties and consumer redress across CFPB, OCC, DOJ, SEC, FINRA, and Federal Reserve actions. The conduct underlying those actions ran from at least 2002 — well over two decades.
Each settlement included remediation commitments. Each was followed by another action. The 2016 CFPB order on unauthorized accounts was followed by the 2018 auto-insurance and mortgage settlement, the 2020 criminal DOJ resolution, the 2022 $3.7 billion order, and a sequence of SEC and FINRA actions targeting the wealth-management arm specifically. The 2025 cash sweep action and 2025 FINRA customer-information action came while the 2018 Federal Reserve enforcement was still in effect — that is, while remediation was supposedly being completed.
The institutional defense, repeated across nearly every settlement, is some version of: this conduct reflects the past culture, we have made fundamental changes, this could not happen today. The defense is then followed, with regularity, by another enforcement action.
The structural takeaway
The Wells Fargo record is not a story about bad people. It is a story about what an institution produces when it is structured to produce it. A retail bank with cross-sell quotas produces unauthorized accounts. A mortgage business compensated on rate-lock extensions produces inappropriate rate-lock extension charges. A broker-dealer with proprietary product economics produces unsuitable product recommendations. An advisory business that captures the spread on client cash produces cash sweep programs that disadvantage clients. The conduct varies. The mechanism is the same: a structure in which the firm's revenue depends on something other than the client's outcome.
"Fiduciary" rhetoric is a marketing layer. The structure is what governs.
This is the case for understanding what a fiduciary registered investment adviser actually is — and is not.
Commons Capital is registered solely as an Investment Adviser under the Investment Advisers Act of 1940. There is no broker-dealer arm. There is no proprietary fund family, no structured product shelf, no insurance subsidiary, no in-house cash sweep program from which the firm earns a spread. Compensation is a single transparent advisory fee. Portfolios are built from individual securities — individual stocks, individual bonds, preferred stocks, REITs, and selectively used alternatives — chosen for the client's specific tax position, income needs, and concentration profile, not assembled from a model. The firm's economics are aligned with the client's because there is no other source of revenue.
That alignment does not make Commons Capital uniquely virtuous. It makes the firm structurally simple. The simplicity is the point. When the only thing the firm earns is the client's advisory fee, the only thing worth doing is earning it.
What's next in this series
Subsequent installments will walk through the public regulatory record of the other major wirehouses — Goldman Sachs, Morgan Stanley, Merrill Lynch, and JPMorgan Chase. Each piece will use the same format: primary sources only, institutional pattern over individual character, structural conclusion. The cumulative case is the case.
This material is for informational purposes only and reflects analysis of publicly available regulatory records. It is not a recommendation to take any action with respect to any specific firm or financial product. Past regulatory matters do not necessarily predict future conduct or outcomes. Readers considering changes to their advisory relationships should consult their tax and legal advisors. Commons Capital is a Registered Investment Adviser. Registration does not imply a certain level of skill or training.
1. Federal Reserve Board, "Federal Reserve Board announces termination of enforcement action with Wells Fargo," March 5, 2026. https://www.federalreserve.gov/newsevents/pressreleases/enforcement20260305a.htm
2. SEC Regulation Best Interest, 17 CFR § 240.15l-1, effective June 30, 2020. The SEC's adopting release describes Reg BI as a "best interest" standard distinct from a fiduciary standard. https://www.sec.gov/regulation-best-interest ↩
3. Investment Advisers Act of 1940, 15 U.S.C. § 80b-1 et seq. Fiduciary duty under the Act is described in the SEC's "Commission Interpretation Regarding Standard of Conduct for Investment Advisers," Release No. IA-5248 (June 5, 2019). https://www.sec.gov/rules/interp/2019/ia-5248.pdf ↩
4. SEC Press Release 2025-16, "SEC Charges Pair of Wells Fargo Advisory Firms and Merrill Lynch with Compliance Failures Relating to Cash Sweep Programs," January 17, 2025. https://www.sec.gov/newsroom/press-releases/2025-16. SEC Order: https://www.sec.gov/files/litigation/admin/2025/34-102229.pdf ↩ ↩2 ↩3
5. SEC Press Release 2023-159, "Wells Fargo Settles with SEC for Charging Excessive Advisory Fees," August 25, 2023. https://www.sec.gov/newsroom/press-releases/2023-159 ↩
6. SEC Press Release 2022-85, "SEC Charges Wells Fargo Advisors With Anti-Money Laundering Related Violations," May 20, 2022. https://www.sec.gov/newsroom/press-releases/2022-85 ↩ ↩2
7. FINRA Letter of Acceptance, Waiver, and Consent (AWC), Wells Fargo Clearing Services, May 2025. Reference: AdvisorHub coverage and FINRA disciplinary database. Substantiate via FINRA BrokerCheck firm record before publication. ↩
8. Consumer Financial Protection Bureau, "Wells Fargo Bank, N.A.," enforcement action page, September 8, 2016, https://www.consumerfinance.gov/enforcement/actions/wells-fargo-bank-2016/ (consent order: https://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf); Office of the Comptroller of the Currency, "OCC Assesses Penalty Against Wells Fargo, Orders Restitution for Unsafe or Unsound Sales Practices," NR-OCC-2016-106, September 8, 2016, https://www.occ.gov/news-issuances/news-releases/2016/nr-occ-2016-106.html. ↩ ↩2
9. Federal Reserve Board, "Responding to widespread consumer abuses and compliance breakdowns by Wells Fargo, Federal Reserve restricts Wells' growth until firm improves governance and controls," February 2, 2018. https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180202a.htm ↩
10. Consumer Financial Protection Bureau, "Wells Fargo Bank, N.A. (2018)," enforcement action page, April 20, 2018. https://www.consumerfinance.gov/enforcement/actions/wells-fargo-bank-na-2018/ ↩
11. U.S. Department of Justice, "Wells Fargo Agrees To Pay $3 Billion To Resolve Criminal And Civil Investigations Into Sales Practices Involving The Opening Of Millions Of Accounts Without Customer Authorization," February 21, 2020. https://www.justice.gov/usao-wdnc/pr/wells-fargo-agrees-pay-3-billion-resolve-criminal-and-civil-investigations-sales ↩ ↩2
12. Consumer Financial Protection Bureau, "CFPB Orders Wells Fargo to Pay $3.7 Billion for Widespread Mismanagement of Auto Loans, Mortgages, and Deposit Accounts," December 20, 2022. https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-wells-fargo-to-pay-37-billion-for-widespread-mismanagement-of-auto-loans-mortgages-and-deposit-accounts/ ↩
13. Federal Reserve Board, "Federal Reserve announces Wells Fargo is no longer subject to the asset growth restriction from the Board's 2018 enforcement action against the bank," June 3, 2025. https://www.federalreserve.gov/newsevents/pressreleases/enforcement20250603a.htm ↩
