Nearly four years after Wells Fargo’s reputation was terminally crushed by the humiliating fake accounts fraud scandal, the punishment for Warren Buffett’s favorite bank and its (mostly former) employees is still being doled out, and moments ago the Office of the Comptroller of the Currency announced $59 million in civil charges and settlements with eight former Wells Fargo senior executives on Thursday, including the payment of a $17.5 million fine by John Stumpf, the bank’s former CEO, who also agreed to a lifetime industry ban. Carrie Tolstedt, who led Wells Fargo’s community bank for a decade, faces a penalty of as much as $25 million.
“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,” Joseph Otting, who heads the OCC, said in a statement.
Wells Fargo unleashed unprecedented public and political ire in 2016 after its was revealed that bank employees opened millions of fake accounts to meet sales goals. That and a slew of retail-banking issues that subsequently came to light have led to regulatory fallout that’s in many cases unprecedented for a major bank, including a growth cap from the Federal Reserve. It also led to a historic Congressional grilling of the bank’s then CEO, John Stumpf, who resigned shortly after.
Regulatory actions against Wells Fargo have also included billions of dollars in fines and legal costs, and an order giving the OCC the right to remove some of the bank’s leaders. The Department of Justice and the Securities and Exchange Commission also have been investigating the lender’s issues.
Why did it take 4 years for some individual justice to finally emerge? Simple: regulatory capture – as Bloomberg adds, the OCC drew scrutiny of its own as the firm’s main regulator throughout the scandals, prompting an internal review at the agency.
The OCC and the Fed have both cited a wide-ranging pattern of abuses and lapses at Wells Fargo, yet despite the universal condemnation, the bank’s biggest shareholder, Warren Buffett, has refused to dispose of his stake.