Last week, California and federal regulators fined Wells Fargo, one of the largest US banks, $185 million in civil penalties after bank employees secretly opened millions of unauthorised accounts for their customers so they could meet aggressive sales goals.
Today, Finance Magnates has learned that the Wells Fargo executive who headed the unit where employees are alleged to have opened these accounts is leaving the bank with millions of dollars in stock and options, according to a CNBC report.
In July, the bank announced the departure of Carrie Tolstedt, the former head of community banking, after she decided to “retire at year’s end after a long and successful career.”
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According to a Wells Fargo proxy statement, she is reported to be entitled to around $95 million in accumulated stock and options over her career, based on when the stock was trading around $49 per share last week.
Although Tolstedt’s involvement in the alleged behaviour has not been clarified, she is reported to have run the related division “during the entire period in which the customer abuse was alleged, extending back to 2011,” according to CNBC.
Internal Controls and Monitoring
Wells Fargo’s internal controls and monitoring identified the behaviour in the division, which led to the termination of around 5,300 staff over the practice.
Leaders in the community bank subsequently worked to “significantly strengthen training, monitoring, oversight and compensation structure”, which led to a reduction in this behaviour.
Wells Fargo is due to implement a further set of measures to address related problems including sending customers written confirmation after opening a deposit account or applying for a credit card to help prevent a recurrence of these events.