Former Wells Fargo CEO John Stumpf agreed to a lifetime ban from the banking industry and a $17.5 million fine on Thursday, a result of the fake-accounts scandal that roiled Wells Fargo when he ran the bank, the Charlotte Observer reports. Stumpf’s punishment — which he agreed to in a settlement with the Office of the Comptroller of the Currency (OCC), Wells Fargo’s federal regulator — marks a dramatic downfall for the once-venerated banker. Taking office as CEO in 2007, he successfully led the bank through the financial crisis and its 2008 acquisition of Charlotte-based Wachovia before resigning in the fake accounts scandal. OCC also announced charges against five former Wells Fargo executives and settlements with two others Thursday. In total, former executives are facing $59 million in fines.
Carrie Tolstedt, who used to run the consumer bank — where the alleged abuses occurred — was among those charged. Regulators are seeking an industry ban for Tolstedt, along with a $25 million fine. Comptroller Joseph Otting said the actions against executives “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.” The bank’s new CEO, Charlie Scharf, wrote to staff members, “We must all dedicate ourselves to ensuring that such failings never again occur at Wells Fargo.” Regulators said the root cause of the misconduct was the business model in the firm’s consumer bank, which set unreasonable sales goals on purpose, and then put unreasonable pressure on employees to reach those goals. That fostered an atmosphere that “perpetuated improper and illegal conduct,” the OCC said.
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