Ex Wells Fargo executive escapes prison sentence in fake accounts scandal

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Ex Wells Fargo executive escapes prison sentence in fake accounts scandal
Ex Wells Fargo executive escapes prison sentence in fake accounts scandal

Carrie Tolstedt, a former executive at Wells Fargo, has been sentenced to three years of probation for obstructing regulators’ investigation into the bank’s fake-accounts scandal.

Tolstedt, who left the bank in 2016, pleaded guilty to the criminal charge. Her defense argued for probation with six months of home confinement instead of the 12-month prison sentence sought by prosecutors.

Wells Fargo faces billions in settlements

Wells Fargo has spent billions of dollars over the past eight years settling allegations related to the scandal, in which Tolstedt played a significant role.

As head of Wells Fargo’s community bank, she oversaw an aggressive cross-selling strategy that resulted in over 2 million fake accounts being opened without customers’ consent.

Both Tolstedt and the bank’s former CEO, John Stumpf, faced charges related to the scandal in 2020.

Stumpf was banned from the banking industry and fined $17.5 million, while Tolstedt settled civil cases with the Office of the Comptroller of the Currency and the SEC for $17 million and $3 million, respectively.

Prison sentences for high-level executives in such cases are rare. Wells Fargo has faced ongoing challenges since the scandal, including a cap on its assets imposed by the Fed in 2018.