Three former Wells Fargo executives face hefty fines over the bank’s fake account scandal after a judge recommended that they collectively pay $18.5 million in fines for failing to halt the 2016 scheme.
In a decision released Wednesday, administrative judge Christopher McNeil said there was enough evidence to recommend hefty fines for Claudia Russ Anderson, David Julian and Paul McLinko.
McNeil recommended that Russ Anderson, the former risk officer of the bank’s banking group, be fined $10 million. Julian, Wells’ former chief auditor, should be fined $7 million, the judge said in his recommendation, while McLinko, the bank’s former executive audit director, should be fined $1.5 million.
McNeil also recommended banning Russ Anderson and Julian from working in the banking industry, and giving McLinko 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 they collectively pay $18.5 million. Pictured: A Wells Fargo bank branch in New York City (file photo)
In February 2020, Wells Fargo agreed to pay $3 billion to settle criminal and civil investigations into a long-running practice in which company employees opened millions of unauthorized bank accounts to meet unrealistic sales targets.
Since the scandal came to light in 2016, the megabank has paid billions in fines to state and federal regulators, reshuffled its board of directors, and seen two CEOs and other top executives leave the company.
Recommendations from McNeil are the latest move by regulators seeking to impose sanctions on former employees of the bank who were allegedly involved in the scheme or failed to put an end to the scheme.
In his report, McNeil said all three were at fault and that their “conduct constituted an unsafe or unsound practice and violated fiduciary duties” owed to the bank.
His recommendations were made to the Office of the Comptroller of the Currency (OCC), which now has 90 days to make a final decision on the matter.
In February 2020, Wells Fargo agreed to pay $3 billion to settle criminal and civil investigations into a long-running practice in which company employees opened millions of unauthorized bank accounts to meet unrealistic sales targets
Since last year, the OCC had previously requested a permanent ban for Russ Anderson, but necessarily for Julian. McNeil said his recommendations were based on “incriminating evidence” that was not available when the Notive of Charges was issued.
Lawyers for the three former Wells Fargo executives said they were “disappointed” with the judge’s recommendations, and suggested they challenge the OCC over the fines. All three insist they have done nothing wrong.
Russ Anderson, Julian and McLinko have 30 days to contest the recommendations, while OCC acting chief Michael Hs has 90 days to make the organization’s final decision.
The three defendants will have a chance to ask a federal appeals court to review any sentences ultimately handed down.
“We are very disappointed by the decision, but not surprised,” Matthew Martens, a lawyer for Julian, said in a statement to the court on Wednesday. American banker.
“As we’ve said from the start, Mr. Julian is being scapegoated and has yet to receive a fair trial. We intend to challenge what we consider to be a deeply flawed decision and are confident in our appeal prospects.”
Before the bank’s $3 billion settlement, five former executives at Wells Fargo were charged with misconduct, while John Stumpf (pictured speaking in 2020) – the bank’s former CEO – was barred from working in the banking industry
In a separate statement, Timothy Crudo, an attorney for McLinko, told the publication, “Mr. McLinko has not engaged in any wrongdoing. Despite the unfairness that has permeated this proceeding, we are confident that he will prevail in the end.”
Before the bank’s $3 billion settlement, five former executives at Wells Fargo were charged with misconduct, while John Stumpf – the bank’s former CEO – was banned from working in the banking industry.
Stumpf also received a $17.5 million civil fine.