Wells Fargo to face trial over fake accounts scandal

Wells Fargo to face trial over fake accounts scandal

WASHINGTON Reuters - The Office of the Comptroller of the Currency OCC, a top US bank regulator, is scheduled to begin a civil trial on Monday for three former Wells Fargo Co executives over their alleged roles in a scandal involving fake accounts at the San Francisco lender.

The proceedings before an in-house OCC judge in Sioux Falls, South Dakota, will mark a rare public confrontation between the regulator and former top bank executives it says are partly culpable for Wells Fargo's misconduct.

The OCC alleges that Wells Fargo's former risk officer Claudia Russ Anderson, the former chief auditor David Julian and former executive audit director Paul McLinko failed to properly perform their duties and responsibilities, contributing to Wells Fargo's systemic sales practices from 2002 to 2016.

The regulator brought civil charges last year against the trio, as well as other former Wells Fargo executives, and has demanded they pay nearly $19 million combined to settle the matter. It also seeks to barre Russ Anderson from the banking industry.

Russ Anderson, Julian and McLinko are against the allegations. The attorneys for the trio did not respond to inquiries about comment.

This hearing represents the culmination of the OCC's longstanding efforts to hold these individuals responsible for material failure in risk management and consumer harm, the OCC said in a statement, adding that it expects the trial to last at least two weeks.

The long-running scandal over Wells Fargo's fraudulent sales culture that led staff to open millions of unauthorized or fraudulent customer accounts has cost the bank billions of dollars in civil and criminal penalties and has badly damaged its reputation.

A spokesperson for Wells Fargo did not immediately respond to a request for comment on Sunday.