01:03 PM EST, 01/17/2025 (MT Newswires) -- (Updates with response from Bank of America ( BAC ) spokesperson in the seventh and eighth paragraphs.)

Wells Fargo's ( WFC ) clearing unit will pay a $28 million civil penalty, while its financial advisory subsidiary will pay $7 million, the US Securities and Exchange Commission said Friday.

The penalties settle charges that the firms failed to adopt adequate policies and procedures to prevent violations of the Advisers Act in their cash sweep programs, according to the federal regulatory agency.

Bank of America's ( BAC ) Merrill Lynch unit agreed to a $25 million fine to resolve similar charges, the SEC said.

According to the SEC, the firms failed to adequately consider clients' interests when offering cash sweep program options, especially during periods of rising interest rates. They also did not provide proper guidance to financial advisors on managing client cash in advisory accounts.

Neither Wells Fargo ( WFC ) units nor Merrill Lynch admitted or denied the charges, the SEC said.

In a statement to MT Newswires, a Wells Fargo ( WFC ) spokesperson said the agreement "puts this broader industry matter behind us," adding the company had already resolved many of the issues cited by the SEC.

A Bank of America ( BAC ) spokesperson told MT Newswires that Merrill Lynch has cut the minimum thresholds for investing cash and increased the rates paid to advisory clients in its bank deposit program while also improving its internal oversight.

"In fact, Merrill was one of the first large firms to offer a significantly higher cash sweep rate for advisory clients' uninvested cash," the Bank of America ( BAC ) spokesperson said on Friday.

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