Wells Fargo agrees to pay $3BILLION in scandal over fake accounts that employees opened to meet sales goals
- Wells Fargo agreed to pay $3 billion to settle criminal and civil investigations to end the fake accounts scandal, which first came to light in 2016
- Employees at the fourth largest bank in the US were pressured to open millions of unauthorized bank accounts in order to meet unrealistic sales goals
- Wells, which once held a sterling reputation, agreed in its settlement to pay $500 million to investors who were impacted by the bank's behavior
- The scandal led to billions in fines, a reshuffling of the Wells Fargo board of directors and the departure of two chief executives
Wells Fargo agreed Friday to pay $3 billion to settle criminal and civil investigations into a long-running practice whereby company employees opened millions of unauthorized bank accounts in order to meet unrealistic sales goals.
Since the fake accounts scandal came to light in 2016, Wells has paid out billions in fines to state and federal regulators, reshuffled its board of directors and seen two CEOs and other top-level executives leave the company.
The $3 billion payment includes a $500 million civil payment to the Securities and Exchange Commission, which will distribute those funds to investors who were impacted by Wells' behavior.
![Wells Fargo, the fourth largest bank in the US by assets, agreed Friday to pay $3 billion to settle criminal and civil investigations into a long-running practice whereby company employees opened millions of unauthorized bank accounts in order to meet unrealistic sales goals](https://i.dailymail.co.uk/1s/2020/02/21/21/25038890-8030575-image-a-1_1582320915928.jpg)
Wells Fargo, the fourth largest bank in the US by assets, agreed Friday to pay $3 billion to settle criminal and civil investigations into a long-running practice whereby company employees opened millions of unauthorized bank accounts in order to meet unrealistic sales goals
![Since the fake accounts scandal came to light in 2016, Wells has paid out billions in fines to state and federal regulators](https://i.dailymail.co.uk/1s/2020/02/21/22/25040592-8030575-image-a-13_1582324810939.jpg)
Since the fake accounts scandal came to light in 2016, Wells has paid out billions in fines to state and federal regulators
'Wells Fargo traded its hard-earned reputation for short-term profits,' said U.S. Attorney Nick Hanna for the Central District of California.
Before the scandal broke, Wells Fargo was considered to have a sterling reputation among the big banks.
The bank referred to its branches as 'stores,' and once had a policy of trying to get each Wells Fargo customer to have eight financial products with the company.
Wells' sales policies, pushed by top management, were aggressive and unrealistic.
Bank employees were berated for not making bloated sales quotas, which ultimately resulted in many employees gaming Wells Fargo's sales system in order to meet these artificial sales goals.
For example a number of Wells Fargo customers, notably the elderly, were signed up for online banking when they did not have Internet access.
The documents that lay out the charges against Wells Fargo lean heavily on the behavior of 'Executive A,' described as the head of Wells' community bank business and the regional bank division from 2002 until 2017.
Carrie Tolstedt held those positions during that time period.
![A number of Wells Fargo customers, notably the elderly, were signed up for online banking when they did not have Internet access](https://i.dailymail.co.uk/1s/2020/02/21/22/25040590-8030575-image-a-14_1582324883185.jpg)
A number of Wells Fargo customers, notably the elderly, were signed up for online banking when they did not have Internet access
Tolstedt was aware of employees using fraudulent means to achieve sales goals as early as 2005, according to the DOJ.
'I just want (Executive A) to be constantly aware of this growing plague,' one Wells Fargo executive wrote in an email.
The settlement with the Department of Justice covers Wells Fargo as a company, and the DOJ could still go after individuals for violating bank laws.
The Office of the Comptroller of the Currency, one of the nation's bank regulators, fined several of Wells' former top executives earlier this year for their role in the scandal.
Former chief executive John G. Stumpf was fined $17.5million and agreed to a lifetime ban from the banking industry. The OCC sued Tolstedt for $25million for her role in the scandal, a suit that Tolstedt's lawyers say they intend to fight.
Current Wells Fargo CEO Charlie Scharf, who started the job only a few months ago, has staked his early reputation on resolving all of the bank's legal questions. He has been blunt in saying that what the bank did under previous management was unacceptable.
'The conduct at the core of today´s settlements - and the past culture that gave rise to it - are reprehensible and wholly inconsistent with the values on which Wells Fargo was built,' Scharf in a statement.
Most watched News videos
- Dramatic moment Ukraine destroys Russian bridge in Kursk region
- Meghan and Harry visit music school in Colombia
- Tourists watch in shock as migrants get off boat on a Balearic beach
- Moment French police ram speedboat into overcrowded migrant vessel
- Russian troops beaten and taped to trees for being 'drunk'
- King Charles receives formal welcome as he arrives at Balmoral
- Sickening moment Russian soldier displays Ukrainian severed head
- Moment cops find LuluLemon shoplifter hiding in Tesla trunk
- Harry and Meghan enjoy VERY steamy salsa dance before quick kiss
- Fisherman who spotted superyacht wreckage reveals what he found
- Superyacht disaster survivors seen as firefighters continue search
- Meghan and Harry greet audience before her talk in Colombia