© Reuters. FILE PHOTO: Wells Fargo CEO Stumpf testifies before Senate Banking Committee hearing on firm’s sales practices on Capitol Hill in Washington

By Karen Freifeld and Chris Prentice

WASHINGTON (Reuters) – Wells Fargo & Co’s (N:) regulator on Thursday announced it had brought civil charges against eight former executives, including former Chief Executive Officer John Stumpf, marking the first federal action against individuals for their role in the bank’s sales practices scandal.

Stumpf agreed to pay $17.5 million to settle the charges brought by the Office of the Comptroller of the Currency, while former human resources head Hope Hardison and Michael Loughlin, former chief risk officer, settled for $2.25 million and $1.25 million, respectively, the OCC said.

Stumpf, who could not immediately be reached for comment, also agreed to a lifetime ban on working for an OCC-regulated bank.

Five other former executives refused to settle, including Wells Fargo’s former retail bank head Carrie Tolstedt who is facing a potential $25 million civil monetary penalty under the OCC charges. She and the other executives will fight the charges before a judge under the OCC’s administrative process.

“Throughout her career, Ms. Tolstedt acted with the utmost integrity and concern for doing the right thing. A full and fair examination of the facts will vindicate Carrie,” a lawyer for Tolstedt said in a statement.

In a memo to Wells Fargo employees, CEO Charlie Scharf said the company was reviewing Thursday’s filings and will determine what, if any, further action is appropriate in respect to any of the individuals who were named.

The OCC actions would be the first time a federal government agency has sought to punish individuals for their roles in the San Francisco-based lender’s scandal, instead of just the institution.

In bringing its charges, the OCC said these individuals failed to adequately perform their responsibilities, which contributed to the bank’s systemic sales practices problems.

“The misconduct of these individuals allowed the practices to continue for years, affecting millions of bank customers and thousands of lower level bank employees,” it said.

The country’s fourth largest U.S. lender has paid out more than $4 billion in fines and penalties since the 2016 revelation that the bank’s sales practices encouraged employees to open potentially millions of unauthorized bank accounts in order to hit lofty sales targets.

Since then, internal and external probes have uncovered issues in each of Wells Fargo’s major business lines, including wealth management and the commercial bank. The fallout has also resulted in the Federal Reserve imposing an unprecedented growth restriction on Wells Fargo’s balance sheet until it proves it has fixed its risk management and controls.

Last year, about 20 former and then-current Wells Fargo executives and directors settled scandal-related allegations in private litigation brought by shareholders for $240 million.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link