John Stumpf: Ex-Wells Fargo boss pays $17.5m to settle charges – BBC News

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John Stumpf: Ex-Wells Fargo boss pays $17.5m to settle charges – BBC News

Now ex-Wells Fargo CEO John Stumpf testifying at a Senate Banking, Housing, and Urban Affairs hearing in 2016.Image copyright
Getty Images

Former Wells Fargo chief executive John Stumpf is to pay $17.5m (£13.3m) to settle charges over the bank’s fake accounts scandal.

He was also banned from working in the financial industry “in any manner” for life.

It’s a rare example of a top banking executive being personally punished for failing to stop misconduct.

The charges came after it was revealed that millions of fake bank accounts had been set up to meet sales targets.

In August 2017, the lender said up to 3.5 million accounts may have been created for customers without their permission.

The accounts were created over a period of eight years.

Mr Stumpf’s lifetime ban is more severe than anything faced by financial industry executives in the wake of the 2008 financial crisis.

The Office of Comptroller of the Currency – the administrator of the federal banking system – also said it had settled with two other former executives, and announced charges against five other former officials.

When Mr Stumpf left the bank after the scandal was first revealed in 2016 he came under attack from Massachusetts senator – and now Democrat presidential hopeful – Elizabeth Warren on Twitter.

At the time it was reported that he had walked away from the bank with $130m.

In response to the ruling, Wells Fargo’s chief executive Charlie Scharf wrote to employees saying: “At the time of the sales practices issues, the company did not have in place the appropriate people, structure, processes, controls, or culture to prevent the inappropriate conduct.

“This was inexcusable. Our customers and you all deserved more from the leadership of this company.”

It’s the latest regulatory blow to the troubled company.

In 2018 Wells Fargo was fined a record $1bn by two US regulators to resolve investigations into car insurance and mortgage lending breaches.

The penalties were imposed by the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency.

In addition to the fine, the bank was also ordered to reimburse customers.

Both regulators said Wells Fargo agreed to settle without admitting any wrongdoing.

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