FILE - In this Sept. 20, 2016, file photo, Wells Fargo CEO John Stumpf testifies on Capitol Hill in Washington, before the Senate Banking Committee. Federal regulators have slapped former Wells Fargo Chief Executive Stumpf with a $17.5 million fine for his role in the bank's sales practices scandal. (AP Photo/Susan Walsh, File)

Former Wells Fargo CEO fined $17.5M for sales scandal

January 23, 2020 - 1:52 pm

NEW YORK (AP) — Federal regulators have slapped former Wells Fargo Chief Executive John Stumpf with a $17.5 million fine for his role in the bank's sales practices scandal.

The Office of the Comptroller of the Currency also announced Thursday it was suing five other former Wells Fargo executives for a total of $37.5 million, for their individual roles in the bank's practices.

This is the first time regulators have punished individual executives for Wells Fargo's wrongdoing. The bank has paid hundreds of millions of dollars in fines and penalties for encouraging employees to open up millions of fake accounts in order to meet aggressive sales goals.

The highest profile executive the OCC is suing is Carrie Tolstedt, who was head of Wells Fargo's community banking business. Tolstedt was the executive most directly in charge of Wells' consumer bank, and has been largely blamed for Wells' poor banking culture. The OCC has sued Tolstedt for $25 million, more than even Stumpf.

“These executives failed to adequately perform their duties and responsibilities, which contributed to the bank’s systemic problems with sales practices misconduct from 2002 until October 2016," the OCC said in a statement.

The two other executives who settled with the OCC and will pay a fine include Hope Hardison, the bank's top human resources executive, and Michael Loughlin, who was the bank's chief risk officer. Hardison will pay a $2.25 million fine and Loughlin will pay a $1.25 million fine.

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