A regulator barred former Wells Fargo chief executive John Stumpf from the banking industry and fined him $17.5 million over the firm’s fake-accounts scandal, an extraordinary sanction for a top executive at a large bank, Wall Street Journal Reported.
Mr. Stumpf reached a settlement with the Office of the Comptroller of the Currency which included an agreement to the lifetime ban. The sanctions against Mr. Stumpf haven’t been seen in recent years. During the economic crisis of 2008, banks paid tens of billions of dollars in fines for misconduct, but due to lack of charges against individuals, onlookers criticized the enforcement efforts.
On the surface of Mr. Stumpf’s tenure, Wells Fargo seemed to have escaped the financial crisis largely unscathed. But after it became public that an aggressive sales culture led employees to open millions of possibly fake accounts, that reputation was left stained. Employees submitted many complaints about pervasive pressure and illegal sales activity to Mr. Stumpf’s office, but he didn’t respond to them, the agency said.
The fake-accounts scandal came into public view when the OCC, the Consumer Financial Protection Bureau and the Los Angeles City Attorney’s office sanctioned Wells Fargo in September 2016.
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