Three former Wells Fargo executives are facing hefty fines over the bank’s fake account scandal after a judge recommended $18.5 million in group fines for failing to stop the 2016 scheme.
In a decision issued Wednesday, Administrative Law Judge Christopher McNeil said there was enough evidence to recommend large fines for Claudia Ross Anderson, David Julian and Paul McClincoe.
McNeil recommended a $10 million fine for Ross Anderson, the bank’s former Community Bank Group Risk Officer. In his recommendation, the judge said Julian, the former chief auditor of Wales, should be fined $7 million, while McClincoe, the bank’s former chief audit executive, should be fined $1.5 million.
McNeil also recommended that Ross Anderson and Julian be banned from the banking sector, and that McLenko be given a cease and desist order.
Three former Wells Fargo executives are facing hefty fines over the bank’s fake account scandal after a judge recommended a collective $18.5 million payment. Pictured: Wells Fargo bank office in New York City (file photo)
In February 2020, Wells Fargo agreed to pay $3 billion to settle criminal and civil investigations in a long-running practice where company employees opened millions of unauthorized bank accounts in order to achieve unrealistic sales goals.
Since the scandal came to light in 2016, the mega-bank has paid billions of dollars in fines to state and federal regulators, made changes to its board of directors and watched two CEOs and other top executives leave the company.
McNeil recommendations It is the latest move by regulators looking to sanction former employees of the bank who were allegedly involved in, or failed to put an end to, the scheme.
In his report, McNeil said all three were guilty and that their “conduct constituted unsafe or improper practice and breached fiduciary duties” owed to the bank.
Its recommendations have been submitted to the Office of the Comptroller of the Currency (OCC) which now has 90 days to make a final decision on the case.
In February 2020, Wells Fargo agreed to pay $3 billion to settle criminal and civil investigations in a long-running practice where company employees opened millions of unauthorized bank accounts in order to achieve unrealistic sales goals.
As of last year, the OCC had previously sought a permanent ban for Ross Anderson, but necessarily for Julian. McNeil said his recommendations were based on “indictment evidence” that was not available when the charge sheet was issued.
Lawyers for the three former Wells Fargo executives said they were “disappointed” with the judge’s recommendations, and suggested they plan to fight the Economic Crimes Tribunal over the fines. The three maintain that they did nothing wrong.
Ross Anderson, Julian and McClinko will have 30 days to object to the recommendations, while the OCC’s acting board chair, Michael H.S., has 90 days to make the organization’s final decision.
The three defendants will have the opportunity to ask the federal appeals court to review any penalties that are ultimately handed down.
Matthew Martins, Julian’s attorney, said Wednesday in a statement to American banker.
“As we have said from the beginning, Mr. Julian has been made a scapegoat, and he has yet to obtain a fair hearing on the merits of the suit. We plan to challenge what we consider to be a deeply flawed decision and are confident in our prospects on appeal.
Prior to the bank’s $3 billion settlement, five former Wells Fargo executives were charged with misconduct, while John Stumpf (pictured speaking in 2020) – the bank’s former CEO – was banned from working in the banking industry
In a separate statement, McLenko’s attorney, Timothy Crudeau, told the Post: McLenko has not engaged in any misconduct. Despite the injustice of this measure, we are confident that it will prevail in the end.
Before the bank’s $3 billion settlement, five former Wells Fargo executives were charged with misconduct, while John Stumpf – the bank’s former CEO – was banned from working in the banking industry.
Stumpf also received a civil penalty of $17.5 million.
