“It’s gutless leadership,” US Senator Warren told Wells Fargo CEO John Stumft at a senate hearing over how he led the bank to fool investors. Want to get angry? Listen to the video above. We need Warren to be the next US president!
On twelve occasions between 2012 and 2016 Stumpf told investors that Wells Fargo was doing great because the bank had record and increasing numbers of cross-selling, which is the number of accounts opened by the same customers. In this case, approximately two million accounts were opened by customers without their knowledge. Stumpf lied when he denied the bank committed these crimes to fool investors.
The Consumer Financial Protection Agency fined Wells Fargo $185 million for this latest Wall Street scandal, which is a drop in the bucket for the bank, and a small token of doing business-as-usual.
This scam impacted negatively the credit ratings of Wells Fargo customers even if they didn’t use the accounts they didn’t know they had. Meanwhile, Stumpf received over $200 million in stock options in part because of this scam, which drove the bank’s share price upward.
According to Business Insider, “Carrie Tolstedt, the head of the community banking division, was the executive directly responsible for overseeing the retail banking sector of the company, where the fake accounts were created.
In July, Tolstedt retired from Wells Fargo, holding roughly $96.6 million in various stock awards. Numerous times during the testimony on Tuesday, Stumpf was asked why Tolstedt wasn’t fired and whether the bank would use its clawback provision to take back some of that compensation.”
Warren called for Strumpf to be criminally investigated for the fraud he likely ordered. This wasn’t something engineered by some branch manager, not with two million phony accounts. The order had to come from way up.
Who in the bank is accountable? The CEO hasn’t resigned. He hasn’t fired one senior executive. Instead, Wells Fargo’s definition of “accountable” is to push blame on low-level employees who don’t have the money or PR firms to defend themselves. A bank cashier who steals $20 would be facing theft charges, but the department of justice has failed to hold any Wall Street executives accountable for any of the crimes they’ve committed for decades.
On the other hand, CNN reported that a number of Wells Fargo employees were fired for refusing to open the phony accounts, or if they complained about it to higher bank officials. See Wells Fargo Fired Workers in Retaliation For Reporting Fake Accounts–CNN
I should point out that Wells Fargo unofficial and perhaps under the table employee happens to be Wall Street Senator Mitch McConnell. He is unhappy with the Consumer Financial Protection Bureau because it is doing its job, so he’s been trying to defund it since the scandal broke. McConnell and his wife hold more Wells Fargo stock than any other senator. What a sore loser!