Three former senior Wells Fargo executives have agreed to pay six-figure fines to regulators in connection with the bank’s unauthorized account scandal.
Matthew Raphaelson, Kenneth Zimmerman and Tracy Kidd were all once executives in Wells Fargo’s consumer banking unit. The Office of the Comptroller of the Currency found in settlements announced Monday that they either knew or should have known about what the agency described as the unit’s systemic sales misconduct problem.
Raphaelson, Zimmerman and Kidd did not admit to wrongdoing, but they all agreed to cooperate with the agency in litigation related to sales misconduct at the bank. Five other former Wells executives, including onetime consumer banking head Carrie Tolstedt, are currently facing civil charges.
In January, the OCC
The scandal, which emerged in 2016, involved thousands of employees opening millions of potentially unauthorized customer accounts.
A Wells Fargo spokeswoman said Monday that the company has made fundamental changes over the last four years to its business model, compensation programs, leadership and governance.
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Net income and client assets grew even as the firms' headcount continued its steady decline.
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The advisory business ended the year on a strong note, boosted by growth in net interest income, which rose 14% year-over-year.
January 13 -
The No. 3 U.S. bank by assets has made a change at the top after a snowballing scandal involving the creation of fraudulent accounts.
October 12
“The OCC actions against former employees,” the bank spokeswoman said in an email, “are consistent with our belief that we should hold ourselves and individuals accountable, and that significant parts of the operating model of our community bank were flawed at that time”
“We are committing all necessary resources to ensure that we operate with the strongest business practices and controls, maintain the highest level of integrity, and have in place the appropriate culture,” the spokeswoman said. “The company is different today, and we are doing what’s necessary to regain the trust of all stakeholders.”
Raphaelson, a former group finance officer in Wells Fargo’s consumer banking unit who is on the OCC’s list of potential witnesses in the ongoing civil case, agreed to pay a $925,000 civil money penalty. He also consented to a ban from the banking industry.
Zimmerman, who left Wells Fargo in 2016, agreed to pay a $400,000 penalty. He is a former head of the deposit products group in the bank’s consumer banking unit. Kidd, a former head of human resources in the consumer banking unit, agreed to pay $350,000.
Both Zimmerman and Kidd consented to conditions on future employment in the banking industry, including a requirement that they notify the OCC within 20 days of accepting certain positions.
