It’s now come to light that, in late 2014, the SEC raised questions about Wells Fargo’s aggressive cross-selling, almost 2 years before it settled with the bank for opening phony accounts.  According to a letter from Christian Windsor, an SEC attorney in the Division of Corporation Finance, it’s noted that the “cross-sell program is a key element that management believes will help Wells Fargo meet its strategic goals." 

In that regard, Ms. Windsor asked the bank to detail how it tallied the many accounts that one customer might open.  She further asked the bank to provide "an explanation of the methodology you use to calculate the products per household."  The same letter asks Wells Fargo to explain how it measured cross-selling success in the past.

Wells Fargo's Controller Richard Levy responded to the regulator on 1/12/15, saying that its methods to measure cross-selling "remained consistent" over the past 5 years.  The bank wanted savings accounts, individual retirement accounts or other products that "have the potential for revenue generation and long-term viability."

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The SEC letter makes no mention of how unauthorized accounts might affect cross-selling metrics.

It is unclear exactly what prompted the SEC's Corporation Finance Division, which reviews company filings, to ask questions about cross-selling and whether the SEC was satisfied with the response.