John Stumpf, former CEO of Wells Fargo Bank, has agreed to pay the U.S. Securities and Exchange Commission (SEC) $2.5 million to settle charges that he lied to investors about the bank’s retail operations as it was enmeshed in a scandal over fake accounts.
The penalty resulted from charges of negligence rather than fraud, which likely would have carried a much stiffer fine, according to Urska Velikonja, a Georgetown University Law School professor who specializes in SEC actions.
Still, the fine is one of the largest negligence penalties imposed by the SEC under current chair Jay Clayton, she told the Financial Times.
For more than a decade, the bank opened accounts in customers’ names without telling them or asking their approval and charged fees to the accounts.
The scandal exploded in 2016, costing the bank billions in fines and penalties and leading regulators to impose an asset cap on the bank’s operations.
Stumpf and other top Wells Fargo executives also were removed from their jobs.
Earlier this year, Stumpf agreed to pay $17.5 million to the Office of the Comptroller of the Currency as a penalty for his part in the scandal. The office has banned Stumpf from any future role in a U.S. bank.
During his eight years at Wells Fargo, Stumpf earned $166 million but the bank has since regained $69 million of that through negotiation or legal action.
The SEC also has charged Carrie Tolstedt, former president of Wells Fargo Community Bank, in the scandal. Her division was the one that opened the fake accounts.
E-mails showed that she and Stumpf were aware of the problem.
Tolstedt has not yet settled her case.
“The commission will continue to hold responsible not only senior executives who make false and misleading statements, but also those who certify the accuracy of misleading statements despite warnings to the contrary,” SEC enforcement director Stephanie Avakian said in a statement announcing the settlement.
TRENDPOST: As we have long noted, over the decades, in America, as with much of the world, from Bankster Bandits to the Big Pharma Drug Gangs, big-time criminals get a slap on the wrist for high crimes and misdemeanors, while it’s prosecution to the fullest for “We the Peasants” of Slavelandia.
And, the fines imposed on the high-flying criminals are minimal considering the economic toll inflicted upon their victims who get a pittance of what was stolen from them… or nothing at all.
