The Office of the Comptroller of the Currency (OCC) has announced settlements with Wells Fargo’s former Chief Auditor, David Julian, and Executive Audit Director, Paul McLinko, over charges that they failed to detect, document, and escalate the bank’s unethical and illegal sales practices.

McLinko was also accused of failing to maintain professional distance from Wells Fargo’s Community Bank, where the bulk of the sales misconduct occurred.

Julian agreed to pay $100,000 and McLinko agreed to pay $50,000 in monetary penalties. Both agreed to cease and desist from unsafe and unsound practices and violations of banking law.

The settlement resolves the OCC’s previous in-house Final Decision, which the two former executives appealed in January. It represents a drastic reduction of OCC’s original penalties – Julian and McLinko were previously ordered to pay $7,000,000 and $1,500,000 million, respectively.

Fake accounts

Wells Fargo’s systemic illegal practices, which included fraudulently opening millions of fake accounts to meet virtually impossible sales goals, created a scandal when they first came to light in 2016. Consequently, the bank received a growth cap from the Federal Reserve in 2018, and two years later paid out a whopping $3 billion+ in fines to the SEC and DoJ.

The settlements with McLinko and Julian are the latest batch of individual fines leveraged against former Wells Fargo executives related to that systemic sales misconduct. Since 2020, those actions netted $43m+ in total penalties from eight individuals.

That number includes a $17m fine against the bank’s former CEO John Stumpf, and a $17m fine against the former head of its retail banking divisio,n Carrie Tolstedt.

Wells Fargo’s new CEO Charlie Scharf has made compliance and risk management top institutional priorities. The bank recently cleared its twelfth consent order with the CFPB, making the elimination of its growth cap a possibility within the year.