OCC enforcement actions against 3 former Wells Fargo execs

The OCC yesterday announced enforcement actions against three former senior executives of Wells Fargo Bank, N.A., Sioux Falls, South Dakota. The actions were taken in response to the former executives’ unsafe or unsound banking practices related to the bank’s systemic and widespread sales practices misconduct.

The enforcement actions are described in two written decisions issued by Acting Comptroller of the Currency Michael J. Hsu, covering Claudia Russ Anderson and jointly covering David Julian and Paul McLinko.

• The decision covering Ms. Anderson found that from 2013 to 2016, she 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. The decision also noted that Ms. Anderson committed violations of law by failing to provide information or providing false, incomplete, or misleading information to the OCC during its 2015 examinations. Ms. Anderson was issued an order of prohibition and assessment of a $10 million civil money penalty.
• The decision against Mr. Julian and Mr. McLinko resulted in personal cease and desist orders and assessments of civil money penalties of $7 million and $1.5 million, respectively. Julian and McLinko were found to have failed to plan and manage audit activity that would detect and document sales practices misconduct and failed to adequately escalate the sales practices misconduct. Mr. McLinko also failed to maintain professional independence from the Community Bank, the bank’s largest business line that housed the retail branches.