In a rare example of personal accountability for corporate wrongdoing, Wells Fargo's former chief executive, John Stumpf, was fined $17.5 million Thursday by the bank's main federal regulator, which also took punitive action against seven other executives for the bank's toxic sales culture and illegal acts.
In a settlement with the Office of the Comptroller of the Currency (OCC), Stumpf also agreed to a lifetime ban from the banking industry for his role in the company's misdeeds, which included foisting unwanted products and sham bank accounts on millions of customers.
Two other former senior executives agreed to lesser fines and restrictions on their work in the industry, and the regulator said it was taking enforcement action against five others.
Regulators sharply rebuked the former leaders for favoring profits and other market rewards over protecting their customers.
"The bank had better tools and systems to detect employees who did not meet unreasonable sales goals than it did to catch employees who engaged in sales practices misconduct," the office said.
All told, the regulator was seeking tens of millions of dollars in personal fines from the executives, who could face even more serious consequences: A Justice Department investigation into the actions of Wells Fargo and its leaders remains open.
While it is not unusual for companies to face regulatory or even criminal charges, senior executives — particularly chief executives — usually avoid personal repercussions.
The largest American banks, for example, have all paid many billions of dollars to settle civil cases stemming from their mortgage securitization activities in the lead-up to the 2008 financial crisis, but their chief executives have not given up a penny to regulators.
The fine against Stumpf was the largest against an individual in the OCC's history, according to a spokesman for the office.
But the regulator sought a larger penalty — a $25 million fine — from Carrie Tolstedt, the bank's former retail banking leader, who is fighting the agency's civil charges against her.
Tolstedt, who left the bank in 2016, "acted with the utmost integrity" and will be vindicated by "a full and fair examination of the facts," said her lawyer, Enu Mainigi, in a statement.
Stumpf, in a sworn statement to the OCC, blamed Tolstedt and others for what he acknowledged was "systemic" misconduct throughout the bank.
Stumpf, a native of Pierz, Minn., graduated from St. Cloud State and the University of Minnesota before joining Minneapolis-based Norwest Corp. in 1982.
He rose through the giant Minnesota banking company's executive ranks and became a senior leader when it merged with Wells Fargo in 1998.
Wells Fargo's problems erupted into public view in late 2016, setting off a crisis that continues to reverberate more than three years later.
Stumpf, chief executive at the time, was quickly ousted.
His successor, Timothy Sloan, resigned last year after failing to quell the bank's turmoil.
The eight executives charged Thursday "failed to adequately perform their duties and responsibilities" and contributed to problems that stretched back more than a decade, the regulator said.
Wells Fargo's new chief executive, Charles Scharf, said in a memo to employees Thursday that the bank would stop all payments to the former executives, if any were pending.
"This was inexcusable. Our customers and you all deserved more from the leadership of this company," wrote Scharf, who joined Wells Fargo in October.
"We are reviewing today's filings and will determine what, if any, further action by the company is appropriate with respect to any of the named individuals," he added. "Wells Fargo will not make any remaining compensation payments that may be owed to these individuals while we review the filings."
Wells Fargo has been operating since early 2018 under a set of growth restrictions imposed by the Federal Reserve, a rare move that has hobbled the bank's turnaround efforts.
It is one of a dozen enforcement actions that Wells Fargo is working to resolve, Scharf has said.
Staff writer Evan Ramstad contributed to this report.