3 ex-Wells Fargo executives at center of fake accounts fined, one banned from banking
BY AUSTIN WEINSTEINSEPTEMBER 21, 2020 04:12 PM ,
Three former Wells Fargo executives at the center of the bank’s fake-accounts scandal agreed to fines with the bank’s federal regulator Monday, as the regulators’ long-running investigation into the bank exacts punishments on the executives who oversaw the misconduct.
The three former executives — Matthew Raphaelson, Kenneth Zimmerman and Tracy Kidd — all worked in the bank’s vast retail network, known as the Community Bank, where much of the fake-accounts scandal took place. The trio all knew or should have known about the systemic misconduct going on inside the bank, the Office of the Comptroller of the Currency said in its settlements with the former executives.
Over more than a decade, hundreds of thousands of bank employees took part in sham sales practices, opening millions of fake accounts in customers names to meet unreasonably high sales goals, the OCC found in February.
Raphaelson, who regulators said was instrumental in implementing the sales goals system that led to the misconduct as a top planning executive, received the sharpest penalty of the executives. He was fined $950,000 and banned from banking in a settlement with the regulators.
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Zimmerman, a deputy to former Community Bank head Carrie Tolstedt, was fined $400,000. Kidd, a human resources executive, was fined $350,000.
Attorneys for the three former executives did not immediately reply to requests for comment Monday afternoon.
The OCC is seeking to ban Tolstedt, who oversaw the three executives, from banking and fine her $25 million. She is fighting the effort. The three who settled Monday agreed to cooperate in the OCC’s investigations as a part of the settlements.
“The OCC actions against former employees regarding their behavior around the historical Community Banking sales practices are consistent with our belief that we should hold ourselves and individuals accountable and that significant parts of the operating model of our Community Bank were flawed at that time,” Wells Fargo spokeswoman Jennifer Langan said in a statement.
Monday’s settlements mean that a total of 11 former Wells Fargo executives have been charged by or settled with federal banking regulators for the sales scandal, including former CEO John Stumpf, who was banned from banking in February.
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Under CEO Charlie Scharf, who started that role in October, Wells Fargo has repeatedly apologized for the bank’s past behavior, as well as the long struggle to clean up its act after the scandal. As a punishment for the more than a decade of