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Ex-Wells Fargo Retail Banking Head Tolstedt Gets Probation

Wells Fargo

A former Wells Fargo executive has been sentenced to probation for her role in a scandal that rocked the bank in 2016.

Carrie L. Tolstedt, a former head of retail banking at Wells Fargo who left the bank in 2016, received a sentence of three years of probation for her role in misleading regulators during the investigation of the scandal, Bloomberg reported Friday (Sept. 15). 

Tolstedt pleaded guilty to obstruction of a bank examination by the Office of the Comptroller of the Currency (OCC), according to the report.

In her sentencing, U.S. District Judge Josephine Staton agreed with the U.S. Probation Office and Tolstedt’s lawyers that probation was an appropriate punishment, as Tolstedt did not pose a danger to society, the report said. The judge rejected the prosecutors’ request for a 12-month prison term and instead ordered Tolstedt to serve six months of home confinement, pay a $100,000 fine and perform 120 hours of community service.

Prosecutors had said in a court filing that Tolstedt attempted to conceal from regulators “one of the biggest banking scandals in modern history.”

“Corporate wrongdoers must be sent a clear message that maintaining a lucrative position through criminal behavior is not worth the risk,” the prosecutors said.

Tolstedt is the only executive charged in connection with the fake accounts scandal that embroiled Wells Fargo in 2016, per the report.

During that year, it was revealed that thousands of Wells Fargo employees had engaged in fraudulent activities to meet their sales goals according to the report. These employees used customers’ personal information without consent to open millions of phony accounts or persuade customers to open unnecessary accounts.

This scandal was the first of several that plagued the bank, leading to leadership shakeups and the hiring of CEO Charlie Scharf in 2019, the report said.

As a result of the scandal, Wells Fargo has faced significant financial penalties, per the report. The bank has paid over $5 billion in fines and legal settlements, making it one of the costliest banking scandals in modern U.S. history. However, Wells Fargo avoided criminal charges. 

The total reached $5 billion on Sept. 8 when a judge approved a settlement, in which Wells Fargo agreed to pay $1 billion to settle an investor lawsuit tied to the scandal.