Wells Fargo rehires 1000 employees who left over fake-account scandal

Owen Stevens
April 16, 2017

Stumpf and Tolstedt had already given up $41 million and $19 million in compensation, respectively.

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Tim Sloan, who replaced Stumpf as CEO, was described in the report as having little contact with sales practices at the bank before becoming chief operating officer and Tolstedt's boss in November 2015.

Even in 2015 and 2016, Stumpf did not appreciate the scope of the problem, continuing to say that the bank's sales goals were appropriate, the report says. As ThinkProgress' Alan Pyke wrote, these poorly compensated employees faced a awful choice: "do the job correctly and get fired, or lie and maintain a steady income". He has apologized in the past for not being more vigilant, even as he insisted most employees behave ethically.

"We accept the Board's findings as a critical part of our journey to rebuild trust", Sloan said in a statement Monday. The lawyer said that a full and fair examination of the facts would produce a different conclusion. Citing the scandal, an influential investment group is calling for 12 of the 15 board members to be voted out.

"I don't think this is a chapter that is over with". Nearly half a dozen Wells Fargo workers told CNNMoney previous year that they were fired after calling the bank's confidential ethics hotline.

Wells will claw back $28 million more in compensation from Stumpf and $47 million more from Tolstedt. Executives there failed to pay heed to warnings, the report said, noting that senior regional managers called for "unrealistic" sales goals to be scrapped. The bank also continues to face federal and state investigations about its sales practices. One branch manager had a "teenage daughter with 24 accounts, an adult daughter with 18 accounts, a husband with 21 accounts, a brother with 14 accounts and a father with 4 accounts", the report said.

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"Tolstedt and certain of her inner circle were insular and defensive and did not like to be challenged or hear negative information". She also ignored senior bank leaders' views about the consequences of unreasonable sales goals. The investigators said Stumpf protected Tolstedt.

One aspect to the problem at Wells Fargo is evident on the very first page of the report's text, which lists the four "independent" directors who were constituted as an oversight committee to supervise the investigation.

In case you need a refresher on what Wells Fargo did to warrant congressional hearings, a nine-figure fine, and a $110 million class action settlement, the problem was rooted in an overly aggressive sales culture that had come to dominate the bank.

The board said "the investigation identifies cultural, structural and leadership issues as root causes of improper sales practices". "As a result, they missed opportunities to analyze, size and escalate sales practice issues".

Since taking that position, Sanger has clawed back tens of millions of dollars in stock awards and compensation due to Stumpf and Tolstedt. "They explicitly said in their response that they're against a union".

The agency has also warned Wells Fargo that it is likely to order the bank to rehire another worker who said she was sacked in 2011 after trying to gain her supervisors' attention to accounts that she said had been fraudulently created. Sloan, who has been at the bank for about 29 years, said the bank was focused on mending fences with customers.

Wells Fargo reached a $185 million with the government in September and admitted to firing 5,300 employees and creating some 2 million unauthorized accounts. "I want to see some people in decision-making roles be held accountable", he said.

Other reports by VgToday

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