USA recommends a one-year jail sentence for former Wells Fargo supervisor after accounting scandal – The Hill

Federal prosecutors mentioned Friday that the previous head of Wells Fargo’s retail banking division should serve a one-year jail sentence for “obstructing a financial institution audit.”

Additionally they referred to as for “one yr of supervised launch” following the sentencing of Carrie Tolstedt, who pleaded responsible to the costs earlier this yr. She was the one financial institution government to be charged within the 2016 pretend accounts scandal.

Tolstedt “tried to cover one of many largest banking scandals in trendy historical past from regulators,” the courtroom submitting mentioned. “A transparent message should be despatched to financial perpetrators that securing a profitable place by way of prison habits is just not definitely worth the danger.”

Wells Fargo was compelled to pay $3 billion in penalties in 2020 for opening checking and bank card accounts with out clients’ authorization – an try to hit income targets, Bloomberg reported. The financial institution reportedly mentioned it discovered over 3.5 million pretend accounts.

“Because the chief of the group financial institution, the defendant was finest geared up to assist [Comptroller] in resolving the issues at Wells Fargo,” prosecutors wrote in Friday’s submitting. “As an alternative, she ready a memo that she knew the financial institution would offer [Comptroller] and essential info corruptly withheld.”

“Particularly, it withheld information on the variety of staff who had been terminated or terminated pending an investigation into sales-related misconduct and the truth that of the various staff recognized by the financial institution’s personal metrics for potential sales-related misconduct had been identified, solely a small portion of which was withheld. “P.c had been investigated,” the file says.

In her plea, Tolstedt agreed to be banned from working within the banking sector and to pay a $17 million civil penalty. She additionally faces a 16-month jail sentence.

The previous financial institution supervisor settled on the costs she confronted in Could from the Securities and Trade Committee (SEC) as a part of the identical scandal.

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