By Dave Michaels and Ben Eisen

Former Wells Fargo & Co. chief executive John Stumpf agreed Friday to pay $2.5 million to settle civil claims over his role in the bank's fake accounts scandal, while regulators sued another departed Wells executive over fraud allegations.

Mr. Stumpf, who stepped down from his top post in 2016, neither admitted nor denied the Securities and Exchange Commission's claims, which accused him of misleading investors about the success of Wells Fargo's community banking business. Mr. Stumpf was earlier barred from the banking industry and paid $17.5 million to settle claims from the Office of the Comptroller of the Currency. An attorney for Mr. Stumpf declined to comment.

Separately, the SEC sued former consumer-bank head Carrie L. Tolstedt, filing a civil fraud case against her in San Francisco federal court. The regulators said Ms. Tolstedt publicly described and endorsed a key measure of Wells Fargo's business, the "cross-sell metric" -- or the number of products the bank sold to its customers -- without disclosing that it was inflated by unused and unauthorized accounts and services.

The SEC's lawsuit seeks a court judgment ordering Ms. Tolstedt to pay fines and barring her from serving as an officer or director of a public company. The OCC, another of the bank's regulators, separately charged Ms. Tolstedt earlier this year, seeking $25 million and a lifetime ban from the banking industry.

Enu Mainigi, an attorney for Ms. Tolstedt, said the former Wells executive acted appropriately and would fight to clear her name.

"It is unfair and unfounded for the SEC to point the finger at Ms. Tolstedt when her statements were not only true but also thoroughly vetted by others as part of Wells Fargo's policies, procedures and systems of controls," Ms. Mainigi said.

The nation's fourth-largest bank and its former executives have been under regulatory scrutiny since its fake-accounts scandal came to light more than four years ago. The bank has been hit with billions of dollars in fines. Executives have paid penalties and had compensation clawed back. The scandal badly tarnished the bank's reputation and weighed on its financial performance.

For years before the scandal became public, the bank said that a key to its success was its ability to sell many accounts and other products to its customers. For a time, it targeted eight products on average for each customer. In the bank's 2010 annual report, Mr. Stumpf said he often was asked why Wells Fargo had set a cross-selling goal of eight. "The answer is, it rhymed with 'great,'" he wrote.

The SEC said that Mr. Stumpf and Ms. Tolstedt approved disclosures to investors that included inflated or misleading figures because many of the accounts were unauthorized or unused. Mr. Stumpf "learned of facts that put, or should have put, him on notice" about inaccuracies related to the cross-selling metric from 2015 to 2016, the SEC said in a settlement order. Ms. Tolstedt also touted these numbers when speaking publicly to investors, the SEC said.

The SEC's order against Mr. Stumpf said he learned in 2013 of sales-related misconduct, after the Los Angeles Times published articles about Wells Fargo employees ordering credit cards without customers' permission, forging client signatures and asking their own family members to open "ghost accounts." Executives such as Ms. Tolstedt played down the extent of wrongdoing in presentations to Wells Fargo's board members, the SEC's order said, while Mr. Stumpf relied on those assurances when he signed off on the bank's financial disclosures.

At the same time, many inside the company were allegedly raising alarms about the company's reliance on cross-selling. One banker who resigned in 2014 told Ms. Tolstedt: "I have spent a majority of my time here at Wells Fargo closing accounts for customers" who didn't need or use them, according to the SEC's complaint.

"If executives speak about a key performance metric to promote their business, they must do so fully and accurately," said Stephanie Avakian, director of the SEC's enforcement division. "The commission will continue to hold responsible not only the senior executives who make false and misleading statements but also those who certify to the accuracy of misleading statements despite warnings to the contrary."

Wells Fargo agreed in February to pay $3 billion to settle civil and criminal investigations with several regulators into the long-running fake accounts scandal, closing the door on a major portion of the legal problems.

The Justice Department, in its agreement, heavily criticized Ms. Tolstedt without mentioning her name. It said that by 2012, regional executives "were regularly raising objections" to her about "unlawful and unethical sales practices." Her lawyer said at the time that "the effort to scapegoat her is both unfair and unfounded."

About a year ago the bank brought in a new CEO, Charles Scharf, who has given priority to appeasing regulators and cutting costs.

Write to Dave Michaels at dave.michaels@wsj.com and Ben Eisen at ben.eisen@wsj.com

(END) Dow Jones Newswires

11-13-20 1606ET