NEW YORK (Reuters) - A brokerage industry regulator on Monday ordered Wells Fargo & Co to return $3.4 million to customers after selling them inappropriate investment products, the latest sign that a culture of problematic sales practices has bled into areas outside its consumer bank.

FILE PHOTO: A Wells Fargo bank sign is pictured in downtown Los Angeles, California, U.S. August 10, 2017. REUTERS/Mike Blake/File Photo

From July 2010 to May 2012, Wells Fargo brokers sold risky exchange-traded products (ETPs) to at least 1,300 affected accounts with moderate and conservative risk profiles. The bank also failed to make sure brokers unloaded the products from customer accounts within 30 days, according to the Financial Industry Regulatory Authority (FINRA).

The products’ value shifted based on market volatility over short durations, but some Wells brokers mistakenly believed they could be used as long-term hedges against a market downturn, FINRA said.

Although Wells, the third-largest U.S. lender, had procedures in place to ensure the products were sold only under certain circumstances, the bank failed to implement them correctly, FINRA said. In doing so, the bank violated two securities rules.

Wells identified the problem and began remediation efforts in May 2012, around the time it faced a separate penalty from FINRA for similar violations related to other types of ETPs.

“In cooperating fully with FINRA, we have made significant policy and supervision changes, including the discontinuation of the ETPs in focus,” Wells Fargo spokeswoman Shea Leordeanu said on Monday.

Wells did not admit or deny wrongdoing in reaching the settlement.

Wells Fargo has been embroiled in a wider sales practices scandal that was touched off more than a year ago. It reached a $190 million settlement with bank regulators and a Los Angeles prosecutor after its employees opened bank accounts in customers’ names without their permission.

Since then, Wells has acknowledged that thousands of employees opened perhaps 3.5 million phony accounts to hit sales targets over a period of several years. The bank also said its employees had sold unwanted auto insurance, a mortgage rate-lock feature and other “add-on” products that customers did not request.

However, the questionable sales practices appeared to have had limited impact so far on its wealth management business, called Wells Fargo Advisors.

Last November, Wells’ management told lawmakers the bank had fired hundreds of employees with brokerage licenses for improper sales practices, but the workers technically were employed by the retail bank.

On a conference call with analysts on Friday to discuss third-quarter results, Chief Executive Officer Tim Sloan said its internal reviews have found the sales scandal did not affect Wells’ wealth or investment management businesses.

Last year, FINRA launched a review of cross-selling programs in which brokerages also try to sell clients products from other parts of the bank, like mortgages. The regulator said this order was unrelated to that review.

Brokerages frequently reach settlements with FINRA over violations that result in refunds to clients.

(FINRA corrects paragraph 2 to reflect that at least 1,300 accounts were affected, instead of at least 1,300 customers)