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US regulator fines ex-Wells Fargo CEO $17.5 mn over fake accounts

US banking regulators fined ex-Wells Fargo Chief Executive John Stumpf $17.5 million over the bank's 2016 fake accounts scandal, blaming Stumpf and other top former executives for the debacle (AFP Photo/JIM WATSON)

New York (AFP) - US banking regulators on Thursday fined ex-Wells Fargo Chief Executive John Stumpf $17.5 million over the bank's 2016 fake accounts scandal, blaming Stumpf and other top former executives for the debacle.

The Office of Comptroller of the Currency settled with Stumpf and two other former executives, while announcing charges against five other former officials whose poor work performance allegedly "contributed to the bank's systemic problems," the agency said.

As part of the settlement, Stumpf also received a ban from the banking industry.

The OCC is seeking a $25 million penalty from former head of community banking Carrie Tolstedt and a $5 million penalty from Claudia Russ Anderson, a former risk officer who allegedly made false and misleading statements and "actively obstructed the OCC's examinations of the bank’s sales practices," the OCC said.

This group of officials can challenge the allegations through an administrative law process, the OCC said.

The penalties are the latest fallout from since the scandal came to light in 2016. Between 2002 and 2016, Wells Fargo employees opened some two million deposit and credit card accounts without the customers' approval or knowledge.

Since the scandal broke, Wells Fargo has reformed its compensation practices and no longer bases employee pay on selling additional accounts to customers.

The bank has also replaced its chief executive twice, most recently with former Bank of New York Mellon chief Charlie Scharf, who has signaled he plans significant changes to try to win back the trust of regulators.