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3 former Wells Fargo executives fined for unsafe banking practices involving fake accounts

On Behalf of | Jan 31, 2025 | Broker Misconduct

Three former senior executives of Wells Fargo Bank have been fined over what were labelled as ‘unsafe or unsound banking practices related to the bank’s systemic and widespread sales practices misconduct’, according to ThinkAdvisor.

The Office of the Comptroller of the Currency said Claudia Russ Anderson, the bank’s former community bank group risk officer, would be fined $10 million and prohibited from working in the banking industry. David Julian, the bank’s former chief auditor and Paul McLinko, its former executive audit director, were fined $7 million and $1.5 million, respectively.

The OCC’s enforcement actions were related to the Wells Fargo fake accounts scandal in 2016.
The Securities and Exchange Commission said the bank opened millions of unauthorized or fraudulent customer accounts between 2002 and 2016 so employees could meet sales targets, and pressured customers into buying unnecessary products. Wells Fargo entered into consent orders with federal regulators to develop plans to avoid any further harm to consumers.

In the OCC’s recent action, it was determined that from 2013 to 2016, Anderson “failed to credibly challenge the bank’s incentive compensation program, failed to institute effective controls to manage risks posed by sales practices misconduct, failed to escalate known or obvious risks, and repeatedly and consistently downplayed the sales practices misconduct.”

Regulators also found that Anderson violated the law by failing to provide information or providing false, incomplete, or misleading information to the OCC during its 2015 examinations.

A separate decision concluded that Julian and McLinko failed to plan and manage audit activity that would detect and document sales practices misconduct and failed to adequately escalate the sales practices misconduct.

McLinko also failed to maintain professional independence from the Community Bank, the Bank’s largest business line that housed the retail branches, the OCC said. The office added that thousands of Wells Fargo employees engaged in sales practices misconduct because they were under pressure to meet unreasonable sales goals.

Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. If you think your financial professional or firm engaged in misconduct that caused investment losses, contact the Chicago investor fraud attorneys of Lewitas Hyman to schedule a free consultation by calling (888) 655 6002 or through our online contact form.