Eight ex-Wells Fargo & Co. executives are facing a record $59 million in fines and the bank’s former CEO received a ban from the industry as regulators took unprecedented steps in holding individuals to account for corporate scandals, Bloomberg reported.
Former CEO John Stumpf agreed to a $17.5 million penalty and an industry ban that no major bank chief has faced, even in the aftermath of the financial crisis. Carrie Tolstedt, who led Wells Fargo’s community bank for a decade, faces a $25 million penalty that the Office of the Comptroller of the Currency said could climb higher.
The OCC laid out the penalties in more than 100 pages of documents Thursday that detailed “massive illegal activity and catastrophic reputational damage” from the bank’s retail banking scandals, Bloomberg reported. Read the Bloomberg story here.
Read the full announcement by the Office of the Comptroller of the Currency.
Wells Fargo Responds to OCC Actions Regarding Former Employees
In response to actions announced by the Office of the Comptroller of the Currency, Wells Fargo & Company CEO and President Charlie Scharf issued the following message to all employees:
“Dear Colleagues,
Today the Office of the Comptroller of the Currency announced a series of actions against former employees regarding their behavior around the historical Community Banking sales practices. In addition, the OCC provided a detailed account of business practices and management responses based on its extensive investigation.
The OCC’s actions are consistent with my belief that we should hold ourselves and individuals accountable. They also are consistent with our belief that significant parts of the operating model of our Community Bank were flawed. At the time of the sales practices issues, the Company did not have in place the appropriate people, structure, processes, controls, or culture to prevent the inappropriate conduct.
This was inexcusable. Our customers and you all deserved more from the leadership of this Company.
We are reviewing today’s filings and will determine what, if any, further action by the Company is appropriate with respect to any of the named individuals. Wells Fargo will not make any remaining compensation payments that may be owed to these individuals while we review the filings.
Over the past three years, the Company has made fundamental changes to its business model, compensation programs, leadership, and governance. We are committing all necessary resources to ensure that we operate with the strongest business practices and controls, maintain the highest level of integrity, and have in place the appropriate culture. The Company is different today, but we know we still have significant work to do to regain the trust of all stakeholders.
I know these things that have occurred in the past have made many of your jobs more difficult.
We must all dedicate ourselves to ensuring that such failings never again occur at Wells Fargo.”