It’s been a while since there’s been news about the scandal involving Wells Fargo creating fake accounts, which has led to huge fines and large-scale terminations at the bank. The Wells Fargo board recently concluded a six-month investigation into the scandal and has decided to take back $75 million from the two executives deemed most responsible for fraudulent accounts being created in order to meet aggressive sales goals. That would be former chief executive John G. Stumpf and former head of community banking Carrie L. Tolstedt.
The report, compiled by the law firm Shearman & Sterling after interviewing 100 current and former employees and reviewing 35 million documents, said that it was obvious where the problems lay. Structurally, the bank was too decentralized, with department heads like Ms. Tolstedt given the mantra of “run it like you own it,” and given broad authority to shake off questions from superiors, inferiors or lateral colleagues.
So many suspicious things should have added up, the report said: People were not funding — or putting money into — their new accounts at alarming rates. Regional managers were imploring their bosses drop sales goals, saying they were unrealistic and bad for customers.
The reports goes on to say that Tolstedt underplayed the number and seriousness of complaints regarding the company’s sales tactics. “She resisted and rejected the near-unanimous view of senior regional bank leaders that the sales goals were unreasonable and led to negative outcomes and improper behavior,” the report reads.
The monies will be retracted from retirement plan payouts owed to both Tolstedt and Stumpf.
(Via New York Times)