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Since the recent Wall Street bailout of 2008, the public's trust still has not fully recovered in the banking establishment. The recent Wells Fargo scandal has lawmakers and the public demanding justice. However, justice in this case is not just restitution of the ill-gotten bank fees paid by victimized customers; the justice being demanded includes criminal charges against the bank's CEO.
Lawmakers have been pressing for a criminal investigation and for criminal charges against CEO John Stumpf. To date, no charges have been filed, but many people, lawmakers included, want the CEO to be held criminally liable for the actions of his company.
Responsible Corporate Officer Doctrine
Wells Fargo CEO John Stumpf could find himself facing criminal charges even if he had no actual knowledge of what was happening. Under the Responsible Corporate Officer doctrine, Stumpf can be prosecuted if it is found that he should have known about the illegal activity, and could have prevented or corrected it. The theory behind the Responsible Corporate Officer doctrine relies on the premise that a corporation must be held accountable for criminal actions, and when the corporate officer in charge either knew of, or should have known of, the criminal wrongdoing, they should be held criminally liable for the corporation's crimes.
In the Wells Fargo case, prosecutors would need to have evidence that shows Stumpf, as part of his duties as CEO, was or should have been aware of the widespread fraud. This can be achieved by showing he was made aware of employees being disciplined, or retaliated against, for complaining about being, or refusing to be, forced to make quotas by signing up customers for new accounts without their consent.
Can the Wells Fargo Employees Face Criminal Charges?
Although Wells Fargo has boasted about the 5,300+ employees they fired as a result of the scandal, not much has been said about whether individual employees will face criminal liability. Typically, businesses can be held civilly liable for their employees' actions (taken in furtherance of the business), and individual employees can also face criminal liability.
Generally, everyone involved in a criminal enterprise will be liable for the criminal actions they committed, as well as potentially the crimes of the entire enterprise. Although Wells Fargo employees may claim duress (that they were forced under threat of losing their jobs), this may not be enough to overcome criminal liability for fraud.