OCC Prepares Civil Suit Against Former Wells Fargo Executives

A Wells Fargo regulator is planning to slap former company executives with civil charges associated with their position in its retail banking scandals, people familiar with the matter told Bloomberg on Thursday (Jan. 23).

The Office of the Comptroller of the Currency (OCC) is putting together “so-called notices of charges” against 10 people, although settlements could be extended to some, the sources said.

People facing charges include former community bank manager Carrie Tolstedt, former chief administrative officer Hope Hardison and former chief auditor David Julian, the sources told Bloomberg.

Negotiations are still in progress, and the company has not made an official announcement, the sources said. An OCC spokesman declined to comment, as did representatives for Tolstedt, Hardison and Julian.

The OCC’s investigation shows regulators that individuals will be accountable along with the company itself. The incident was among the biggest scandals in the banking industry since the 2008 crisis. Aside from financial penalties, people could be prevented from employment in financial services.

The OCC’s move shines a light on the bank’s wrongdoings as its new chief executive officer Charlie Scharf works to move forward and leave behind the past three years of legal woes. The scandal cost the bank billions and led to the firing of two CEOs.

Aside from the OCC’s probe, the U.S. Department of Justice is investigating the matter along with the Securities and Exchange Commission.

The problems started in 2016 when employees were discovered to have possibly opened millions of fake accounts in an effort to hit sales goals. Other departments were also found to doing things that were underhanded. Investigations and settlements soon followed.

The Justice Department is also looking into individual executives, the sources told Bloomberg. An agency spokesperson would not give Bloomberg a comment.

Wells Fargo is no stranger to OCC inquiries and was hit with a $500 million fine. In addition, the regulator was instrumental in firing Hardison and Julian in 2018. It also “issued a rebuke of the bank’s progress under former CEO Tim Sloan during a March hearing before Congress.” Sloan’s retirement quickly followed. When the board conducted a search for a new CEO and hired Scharf, the OCC had to approve it.

In August Wells Fargo announced the hiring of Colleen Taylor to run its Wells Fargo Merchant Services.