Wells Fargo is set to pay some $3 billion to settle federal investigations of its fake accounts and related client abuses, according to several news reports.
The penalties — which could be finalized later today — involve the Justice Department and the Securities and Exchange Commission, people familiar with the matter told The Wall Street Journal and Bloomberg News. The settlement with Justice may include criminal charges, the Journal said.
The news comes about a month after the Office of the Comptroller of the Currency issued fines of $37.5 million against five former Wells Fargo executives and reached settlements of $21 million with ex-Chairman and CEO John Stumpf and several other former members of the bank’s operating committee.
Stumpf was barred from the business and agreed to pay a $17.5 million fine. Hope Hardison, the former chief administrative officer and director of human resources, agreed to pay $7.5 million, while ex-Chief Risk Officer Michael Loughlin reached a deal to pay a $1.25 million fine.
The biggest fine for the former bank execs hit Carrie Tolstedt, who led Wells Fargo’s community bank during the fake-accounts scandal. She now faces a $25 million penalty, but it could be increased, the OCC says. Tolstedt and four others are fighting the allegations and have not reached a settlement.
Current Wells Fargo CEO and President Charlie Scharf told bank employees in a note last month: “The OCC’s actions are consistent with my belief that we should hold ourselves and individuals accountable. They also are consistent with our belief that significant parts of the operating model of our Community Bank were flawed.”
(The bank set aside about $3 billion for legal matters in late 2019.)
Wells Fargo’s advisor headcount stands at roughly 13,510 vs. 13,950 a year ago. That’s down some 1,575 (or 10.4%) from Sept. 30, 2016, when the firm had close to 15,085 registered reps and began making headlines for the fake accounts.
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