California State Treasurer John Chiang on Wednesday announced a sweeping suspension of business relationships with Wells Fargo as punishment for the company's defrauding of customers.
In addition, Chiang vowed to work with the state's two giant public pension funds to change the bank's management structure.
The sanctions, which will last for 12 months, include suspending Wells Fargo as a managing underwriter on state negotiated bond sales, Chiang said. California is the nation's largest issuer of municipal debt.
A Wells Fargo spokesperson issued a statement to CNBC, saying: "We are very sorry and take full responsibility for the incidents in our retail bank. We have already taken important steps, and will continue to do so, to address these issues and rebuild your trust."