This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2020/01/23/business/wells-fargo-ceo-fine.html

The article has changed 4 times. There is an RSS feed of changes available.

Version 1 Version 2
Wells Fargo’s Ex-Chief Fined $17.5 Million Over Fake Accounts Wells Fargo’s Ex-Chief Fined $17.5 Million Over Fake Accounts
(about 1 hour later)
Wells Fargo’s main federal regulator took punitive action against the bank’s former chief executive, John G. Stumpf, and seven other executives on Thursday, seeking millions in personal fines from the leaders it said were accountable for the bank’s toxic sales culture and illegal acts. In a rare example of personal accountability for corporate wrongdoing, Wells Fargo’s former chief executive, John G. Stumpf, was fined $17.5 million on Thursday by the bank’s main federal regulator, which also took punitive action against seven other executives for the bank’s toxic sales culture and illegal acts.
Mr. Stumpf agreed to a lifetime ban from the banking industry and a fine of $17.5 million in a settlement with the Office of the Comptroller of the Currency. Two other former executives agreed to lesser fines and also face restrictions on their work in the industry. In a settlement with the Office of the Comptroller of the Currency, Mr. Stumpf also agreed to a lifetime ban from the banking industry for his role in the company’s misdeeds, which included foisting unwanted products and sham bank accounts on millions of customers. Two other former senior executives agreed to lesser fines and restrictions on their work in the industry, and the regulator said it was taking enforcement action against five others.
The action was a rare case of federal officials holding top executives accountable for their company’s misdeeds, which included foisting unwanted products and sham bank accounts on millions of customers. More charges may be coming: A Justice Department investigation into the actions of Wells Fargo and its leaders remains open. Regulators sharply rebuked the former leaders for favoring profits and other market rewards over protecting their customers.
In announcing its civil action, the banking regulator sharply rebuked Wells Fargo’s former leaders for favoring profits and other market rewards over protecting its customers. “The bank had better tools and systems to detect employees who did not meet unreasonable sales goals than it did to catch employees who engaged in sales practices misconduct,” the office said.
“The bank had better tools and systems to detect employees who did not meet unreasonable sales goals than it did to catch employees who engaged in sales practices misconduct,” the regulator said. All told, the regulator was seeking tens of millions of dollars in personal fines from the executives, who could face even more serious consequences: A Justice Department investigation into the actions of Wells Fargo and its leaders remains open.
In addition to the three executives who reached settlements, the office said it was bringing enforcement actions against five others. It sought its largest penalty — a $25 million fine — from Carrie L. Tolstedt, the bank’s former retail banking leader. While it is not unusual for companies to face regulatory or even criminal charges, senior executives — particularly chief executives — usually avoid personal repercussions. The largest American banks, for example, have all paid many billions of dollars to settle civil cases stemming from their mortgage securitization activities in the lead-up to the 2008 financial crisis, but their chief executives have not given up a penny to regulators.
Ms. Tolstedt, who left the bank in 2016, is fighting the agency’s civil charges against her. She “acted with the utmost integrity” and will be vindicated by “a full and fair examination of the facts,” her lawyer, Enu Mainigi, said in a statement. The fine against Mr. Stumpf was the largest against an individual in the O.C.C.’s history, according to a spokesman for the office. But the regulator sought a larger penalty — a $25 million fine — from Carrie L. Tolstedt, the bank’s former retail banking leader, who is fighting the agency’s civil charges against her.
Ms. Tolstedt, who left the bank in 2016, “acted with the utmost integrity” and will be vindicated by “a full and fair examination of the facts,” her lawyer, Enu Mainigi, said in a statement.
Mr. Stumpf, in a sworn statement to the O.C.C., blamed Ms. Tolstedt and others for what he acknowledged was “systemic” misconduct throughout the bank.Mr. Stumpf, in a sworn statement to the O.C.C., blamed Ms. Tolstedt and others for what he acknowledged was “systemic” misconduct throughout the bank.
Wells Fargo’s problems erupted into public view in late 2016, setting off a crisis that continues to reverberate more than three years later. Mr. Stumpf, the chief executive at the time, was quickly ousted. His successor, Timothy J. Sloan, resigned last year after failing to quell the bank’s turmoil.Wells Fargo’s problems erupted into public view in late 2016, setting off a crisis that continues to reverberate more than three years later. Mr. Stumpf, the chief executive at the time, was quickly ousted. His successor, Timothy J. Sloan, resigned last year after failing to quell the bank’s turmoil.
The eight executives charged on Thursday “failed to adequately perform their duties and responsibilities” and contributed to problems that stretched back more than a decade, the regulator said.The eight executives charged on Thursday “failed to adequately perform their duties and responsibilities” and contributed to problems that stretched back more than a decade, the regulator said.
Wells Fargo’s new chief executive, Charles W. Scharf, said in a memo to employees on Thursday that the bank would stop all payments to the former executives, if any were pending.Wells Fargo’s new chief executive, Charles W. Scharf, said in a memo to employees on Thursday that the bank would stop all payments to the former executives, if any were pending.
“This was inexcusable. Our customers and you all deserved more from the leadership of this company,” wrote Mr. Scharf, who joined Wells Fargo in October.“This was inexcusable. Our customers and you all deserved more from the leadership of this company,” wrote Mr. Scharf, who joined Wells Fargo in October.
“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,” he added. “Wells Fargo will not make any remaining compensation payments that may be owed to these individuals while we review the filings.”“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,” he added. “Wells Fargo will not make any remaining compensation payments that may be owed to these individuals while we review the filings.”
Wells Fargo has been operating since early 2018 under a set of growth restrictions imposed by the Federal Reserve, a rare move that has hobbled the bank’s turnaround efforts. It is one of a dozen enforcement actions that Wells Fargo is working to resolve, Mr. Scharf has said.Wells Fargo has been operating since early 2018 under a set of growth restrictions imposed by the Federal Reserve, a rare move that has hobbled the bank’s turnaround efforts. It is one of a dozen enforcement actions that Wells Fargo is working to resolve, Mr. Scharf has said.
This is a developing story. Check back for updates.This is a developing story. Check back for updates.