NEW YORK–The Office of the Comptroller of the Currency (OCC) has hit the former CEO of Wells Fargo with a $17.5-million fine for his role in a huge scandal related to the company’s former sales practices.
The OCC said it was fining ex-CEO John Stump $17.4 million and also suing five other former Wells Fargo executives for a total of $37.5 million for their individual roles in the bank's practices.
According to the regulator, this is the first time it has sought to punish individual members of management for a scandal that eventually led to the firing of more than 5,000 employees. The employees were highly pressured to meet aggressive cross-sales targets as high as eight products per customer, leading many managers to falsify records and open approximately 3.5-million worth of accounts without the customers’ knowledge.
Among the others targeted by the OCC is Carrie Tolstedt, who previously headed up Wells Fargo’s community banking line and who directly oversaw its retail banking functions. The OCC is suing Tolstedt for $25 million.
OCC Statement
“The actions announced by the OCC today reinforce the agency’s expectations that management and employees of national banks and federal savings associations provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations,” stated Comptroller of the Currency Joseph Otting in a statement.
The OCC has also targeted Claudia Russ Anderson, former community bank group risk officer, with a $5 million civil money penalty; James Strother, former general counsel, with a $5 million CMP; David Julian, former chief auditor, with a $2 million CMP, and Paul McLinko, former executive audit director, with a $500,000 CMP.
All have also been issued prohibition orders.
In addition, the OCC announced that two executives with whom it has already settled will pay a fine, including Hope Hardison, the bank's top HR exec, who was fined $2.25 million, and Michael Loughlin, former chief risk officer, who will pay a $1.25 million fine.
“These executives failed to adequately perform their duties and responsibilities, which contributed to the bank’s systemic problems with sales practices misconduct from 2002 until October 2016," the OCC said in a statement.
Former Execs Well Compensated
As CUToday.info has reported, Stump was paid $19.3 million in compensation during 2015; he resigned in 2016. He reportedly retained more than $100 million in vested stock plus accumulated pension and 401(k) benefits of $24 million. Tolstedt was reportedly eligible more than $124 million in compensation at the time she exited the bank.
Wells Fargo has been repeatedly hit with fines for a variety of scandals, including a $1 billion fine from the CFPB for illegal acts in its mortgage and auto loan business, and nearly $200 million in other fines.