WHAT YOU NEED TO KNOW!
- Carrie Tolstedt, the former head of Wells Fargo’s retail bank, has agreed to plead guilty to obstructing a bank examination in relation to the phony accounts scandal in 2016.
- She faces up to 16 months in prison and a $17 million civil penalty from the Office of the Comptroller of the Currency.
- Tolstedt was “significantly responsible” for the widespread sales abuses at the bank, where potentially millions of accounts were opened without customer approval.
Carrie Tolstedt, the former head of Wells Fargo’s retail bank, has agreed to plead guilty to obstructing a bank examination in relation to the phony accounts scandal that shook the bank in 2016. Tolstedt faces up to 16 months in prison under a plea agreement with federal prosecutors filed on Wednesday.
This marks a rare instance of a senior bank executive facing prison time as a result of their job. She was “significantly responsible” for the widespread sales abuses at the bank, where potentially millions of accounts were opened without customer approval.
Additionally, the Office of the Comptroller of the Currency has announced a civil penalty of $17 million against Tolstedt. The penalty announced on Wednesday resolves the charges brought against her by the OCC.
Tolstedt agreed to plead guilty to one count of obstruction of a bank examination and is expected to make her initial court appearance in Los Angeles in the coming weeks, the Los Angeles U.S. attorney’s office said in a statement.
Wells Fargo paid $3 billion in February 2020 to settle federal civil and criminal probes, admitting at the time that it pressured employees between 2002 and 2016 to meet unrealistic sales goals, which led them to open fake accounts for customers.
No criminal charges against individuals were announced at the time, though in 2020, the OCC filed civil charges against and fined Tolstedt and several other former senior bank executives and barred its former CEO, John Stumpf, from the banking industry. Tolstedt is also now barred from the industry.
In response to Tolstedt’s guilty plea, some have said the development did not go far enough.
“Finally, decades after the largest fraud in American history, a banker is going to jail,” said Bartlett Naylor, a financial policy advocate with Public Citizen in Washington.
“But Tolstedt did not operate alone; she had bosses. They must face real justice as well.”