How Two Ex-Auditors Became the Face of Wells Fargo’s Failures

When you thought the Wells Fargo fake accounts drama was cooling down, here comes a fresh twist hotter than the wings on "Hot Ones." Two former internal auditors — David Julian and Paul McLinko- have finally thrown in the towel and settled with the U.S. banking watchdog, the Office of the Comptroller of the Currency (OCC). If you're wondering why this is still a big deal almost a decade after the scandal broke, buckle up. We're diving into the who, what, and why this still matters in 2025.

Wells Fargo's House of Cards

Remember 2016? That year, the OCC exposed Wells Fargo's "unsafe and unsound" sales culture, where millions of unauthorized accounts were opened without customer consent. From transferring funds without permission to tricking customers into bundled products, this was no rogue-employee situation, it was systemic from top to bottom. The aftermath? Billions in fines, a battered reputation, and a Federal Reserve-imposed asset cap that’s still squeezing the bank’s growth. The OCC also put executives like Chief Auditor David Julian and Executive Audit Director Paul McLinko on the hot seat, holding them personally accountable for letting it all slide.

Settlements That Hit the Wallet

On April 25, 2025, the OCC finally dropped the hammer:

• David Julian: Slapped with a $100,000 civil money penalty and a personal cease and desist order.
• Paul McLinko: Nailed with a $50,000 civil penalty and the same desist action.

These settlements wrapped up enforcement actions first launched way back in January 2020. Meanwhile, the OCC has already secured over $43 million in penalties from eight other Wells Fargo execs, including a $10 million fine and banking ban for former community banking risk officer Claudia Russ Anderson.

Why Did It Take Five Years?

Julian and McLinko didn't roll over. They fought the charges, with their attorneys insisting both auditors acted within professional standards. Julian pointed out he stuck to the Institute of Internal Auditors' guidelines, while McLinko’s camp stressed his "decades of honourable service". Dragging it through appeals and court challenges bought them time but also racked up legal costs. Settling now? A tactical move to cut losses and move on.

Still on the Struggle Bus

Under CEO Charlie Scharf’s leadership, Wells Fargo has hustled hard to clean up its act. Compliance and risk management are now front and center. But don't pop the champagne yet, the Federal Reserve's asset cap remains firmly in place. Bank execs are still crossing fingers, toes, and maybe even praying for a Fed green light to lift the cap. Without it, Wells Fargo’s full comeback dreams are on ice.

Lessons For the Professionals

Here’s what the financial world should take home from this saga:

• Accountability: Regulators are cracking down on individuals, not just institutions. Internal auditors and risk officers can face fines, bans, and career consequences.
• Audit Isn’t Just a Checklist: Internal audits must go beyond box-ticking. Professionals need to actively challenge risky incentives and escalate concerns before they snowball.
• Legal Battles Can Bleed You Dry: Julian and McLinko’s five-year fight highlights how regulatory cases can drag on, racking up major legal costs and reputational damage.
• Compliance Culture: Wells Fargo’s asset cap is a clear sign: without strong compliance, growth stalls. Risk management is now a strategic business priority.
• Ethics Isn’t Optional: The scandal hurt real people, from credit scores to financial trust. Ethical failures don’t just cause fines; they damage long-term credibility.
• Justice Moves Like Molasses: Regulatory showdowns can drag on for years. Financial firms need to be battle-ready for long, costly fights that can shred reputations and bottom lines.

What’s Next?

Wells Fargo’s future hinges on shedding its Fed-imposed shackles. How it handles post-scandal compliance will either set it up for redemption or relegate it to Wall Street’s Hall of shame. Meanwhile, the OCC’s aggressive playbook should be a wake-up call for every bank exec, auditor, and risk officer: Mess around, and you will find out. Lost in the shuffle of big fines and exec drama are the real victims: customers who suffered credit score hits and breaches of trust. No settlement or fine can erase the harm done, but accountability is a critical step toward rebuilding a fairer, more ethical banking system. Want more spicy insights on banking, auditing, and compliance? Join 250,000+ smart readers who get fresh updates delivered weekly, straight to their inbox. Subscribe now!