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Former Wells Fargo CEO Gets Lifetime Banking Ban, Executives Fined $55M In Sales Fraud

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Former Wells Fargo CEO Gets Lifetime Banking Ban, Executives Fined $55M In Sales Fraud

The United States Department of Treasury's Office of the Comptroller of the Currency on Thursday announced that former Wells Fargo & Company (NYSE: WFC) CEO John Stumpf has agreed for a lifetime industry ban for his role in the sales fraud at the bank.

Stumpf's Role In The Scandal

Stumpf has also been fined $17.5 million by the OCC for what it described as "a systemic sales practices misconduct problem" at the bank between 2002 and October 2016.

Then the bank's management "imposed unreasonable sales goals on its employees along with unreasonable pressure to meet these goals," which led to "systemic violations of laws and regulations," the OCC said.

The OCC added that Stumpf failed to heed to warning signs, and ignored complaints by employees of the "pervasive sales pressure," and them fearing to lose their jobs for not being able to meet these unrealistic goals.

"I was in the 1991 Gulf War …. This is sad and hard for me to say, but I had less stress in the 1991 Gulf War than working for Wells Fargo." the OCC quoted an email from one of the bank's employees in 2013 addressed to Stumpf.

Other Executives Charged $37.5M

The OCC also issued fines against five other ex-executives, including a $25 million penalty against former head of community banking Carrie Tolstedt, and $5 million each against the former risk officer Claudia Russ Anderson and general counsel James Strother.

A former chief auditor has been fined $2 million, and another executive audit director, $500,000.

"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," Comptroller of the Currency Joseph Otting said in a statement.

Wells Fargo Responds

Wells Fargo CEO Charlie Scharf, in a public statement to employees, said that the OCC's actions are consistent with his belief to hold "ourselves and individuals accountable."

Scharf added that the bank would withhold any remaining compensation owed to the charged individuals until it has reviewed the filings.

"This was inexcusable. Our customers and you all deserved more from the leadership of this Company," Scharf said.

Price Action

Wells Fargo's shares closed 0.70% lower at $48.22 on Thursday. The shares traded 0.25% higher in the after-hours market.

Posted-In: John Stumpf OCC Wells FargoGovernment News Legal Markets General Best of Benzinga

 

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