U.S. Federal Agency issues notices of charges against five former senior execs of Wells Fargo

The Office of the Comptroller of the Currency (OCC) today issued a notice of charges against five former senior executives of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, and announced settlements with the bank’s former Chief Executive Officer (CEO) and other members of the bank’s operating committee.

“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.

The charges stem from the executives’ role in the bank’s systemic sales practices misconduct. The executives and relief sought include:

The notice of charges alleges 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 misconduct of these individuals allowed the practices to continue for years, affecting millions of bank customers and thousands of lower level bank employees. Additionally, the notice states that Ms. Russ Anderson also made false and misleading statements to the OCC and actively obstructed the OCC’s examinations of the bank’s sales practices.

Based on the facts and circumstances of each individual’s actions, the relief sought may include a lifetime prohibition from participating in the banking industry, a personal cease and desist order, and/or CMP. A personal cease and desist order would require the individual to take certain affirmative actions or refrain from certain conduct in any future involvement in the banking industry. Pursuant to federal law, the respondents may request a hearing challenging the allegations and relief sought by the OCC.

The OCC also announced today the issuance by consent of a prohibition order and a $17,500,000 CMP against former bank Chairman and CEO John Stumpf; a personal cease and desist order and a $2,250,000 CMP against the bank’s former Chief Administrative Officer and Director of Corporate Human Resources Hope Hardison; and a personal cease and desist order and assessment of a $1,250,000 CMP against its former Chief Risk Officer Michael Loughlin for their roles in the bank’s sales practices misconduct.

In making the determination to file the notice of charges and enter into these settlements, the OCC considered, among other things, the culpability of these individuals and their financial resources, including compensation previously clawed back by the bank.

The Office of the Comptroller of the Currency (OCC) announced Thursday that they are filing charges against five former senior Wells Fargo Bank executives.

“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,” said Comptroller of the Currency Joseph Otting.

Those facing charges include: Carrie Tolstedt, former Head of the Community Bank; Claudia Russ Anderson, former Community Bank Group Risk Officer; James Strother former General Counsel; David Julian, former Chief Auditor; and Paul McLinko, former Executive Audit Director.

According to court documents, the OCC is asking for $37.5 million in penalties from the bank officials.

The scandals stem from information released in 2016  that employees may have opened millions of bogus accounts to meet sales goals. Issues soon emerged in other divisions, prompting a flurry of probes and settlements. The Justice Department staff also have been scrutinizing the actions of individual executives, people familiar with the investigation have said. A spokesman for the agency declined to comment.

The Office of Comptroller of the Currency imposed a $500 million penalty in 2018 against the bank as well as a  rebuke of the bank’s progress under former CEO Tim Sloan during a March hearing before Congress. .

Jeffrey Newman represents whistleblowers including S.E.C whistleblowers nationwide. He can be reached by emailing him at Jeff@JeffNewmanLaw.com