The former chief executive officer of Wells Fargo Bank, N.A. (Sioux Falls, S.D.) and seven others will have to pay a combined $58.5 million in civil money penalties under charges and orders citing their failure to address systemwide sales practices abuses that continued for some 14 years, according to documents released Thursday by the Office of the Comptroller of the Currency (OCC).
By consent, former bank Chairman and CEO John Stumpf is barred from participating in the affairs of any financial institution and will pay a $17.5 million civil money penalty. The consent order says Stumpf also forfeited all unvested equity awards valued at about $41 million, forfeited his 2016 bonus and salary, and had to return some $28 million in incentive compensation – representing a total of about $70 million in forfeitures.
Also by consent, the OCC issued a personal cease-and-desist (C&D)order and a $2.25 million civil money penalty against Hope Hardison, the bank’s former chief administrative officer and director of corporate human resources; and a personal C&D order and assessment of a $1.25 million CMP against Michael Loughlin, the bank’s former chief risk officer.
The notice of charges provides for the following:
- a prohibition order and $25 million CMP against Carrie Tolstedt, former head of the community bank;
- a prohibition order and $5 million CMP against Claudia Russ Anderson, former community bank group risk officer;
- a personal C&D order and $5 million CMP against James Strother, former general counsel;
- a personal C&D order and $2 million CMP against David Julian, former chief auditor; and
- a personal C&D order and $500,000 CMP against Paul McLinko, former executive audit director.
The OCC said the notice of charges alleges the 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.”
It added 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.”