Wells Fargo Former CEO Banned
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In what the Wall Street Journal calls “unprecedented” and “an extraordinary sanction for a top executive at a large bank,” former CEO John Stumpf has been barred from the banking industry. The decision—and a $17.5 million fine—were part of a settlement between Stumpf and the Office of the Comptroller of the Currency (OCC) for millions of fake bank accounts created at Wells Fargo.
The OCC concluded that Stumpf should have known of the systemic problems and that “there was a culture in the Community Bank that resulted in systemic violations of laws and regulations.” When the scandal became public, employees complained of extreme stress because of pressure to sell more bank products. This pressure led employees to create fake accounts for customers.
Other Wells Fargo executives have been fined and charged, but none have been banned from the industry.
Discussion:
Do you think the decision is fair? Why or why not?
This decision represents a shift from the 2008/2009 financial crisis, when banks paid significant fines but very few individuals were charged. What’s your view of the change?
