WASHINGTON: The Securities and Exchange Commission charged former Wells Fargo CEO John Stumpf and retail banking head Carrie Tolstedt with misleading investors, the watchdog announced Friday. The agency claimed that the former executives misled investors about the widespread sales practice problems at the bank. Stumpf agreed to pay a $2.5 million penalty to settle the charges, while the SEC will litigate fraud charges against Tolstedt in court.

A lawyer for Stumpf did not immediately respond to a request for comment. An attorney for Tolstedt said she was an "honest and conscientious executive," and the SEC charges are "unfair and unfounded."