In the wake of the unfolding story at Wells Fargo, Bove said a sea change could be coming to Wall Street. There is nothing in our culture, nothing in our vision and values that would support that. It’s just the opposite.
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Mr. Stumpf said “Our goal is to get it right with every customer 100% of the time”.
That line is in keeping with San Francisco-based Wells Fargo’s efforts to portray itself as different from Wall Street’s giants – as a bank that realizes that “culture counts” and strives to earn “lifelong relationships, one customer at a time”.
Fund administrator SS&C Technologies said the deal would add 250 employees serving more than 130 fund relationships in United States, UK, Singapore and Hong Kong.
Of course, it was the low-level employees who got canned and blamed. The figure represents less than 1 percent of the bank’s more than $22 billion in profit a year ago. “That is still 1,000 too many”. And current and former employees tell the paper they felt pressure to push products to hang on to their jobs or make bonuses, and that some managers held multiple meetings daily on cross-selling progress.
“Less than two months later, the bank agreed to pay the largest penalty ever imposed by the Consumer Financial Protection Bureau – $185 million – for creating more than 2 million unauthorized customer accounts over five years”. Regulators cited such goals and compensation incentives tied to them as fueling employees’ behavior.
The bank also recently announced it would be eliminating the branch level sales targets at the beginning of 2017.
“This is like McDonald’s saying that now there is “real meat” in chicken nuggets”.
The worker said he’d talked people into signing up for accounts and services they didn’t need. “The best thing I can do is lead this company”, the Wells Fargo CEO told CNBC.
Shares of Wells Fargo slumped 3.3 per cent to close at US$46.96 on Tuesday in NY.
Talk about embarrassingly bad timing.
The chain of responsibility can not be allowed to stop at low-level employees. Elizabeth Warren will surely hammer those points next week, looking for some measure of executive accountability. Some 5,300 employees have been fired. Wells Fargo will work closely with SS&C to provide GFS clients a seamless experience and continuity of services.
Not surprisingly, many people have called for Wells Fargo CEO John Stumpf to resign amid the revelations.
Considering the intense focus of regulators and popular distrust of big banks “It really is insane how stupidly Wells management has behaved”, Sen said via e-mail.
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When we contacted Wells Fargo to ask about the situation Tuesday, senior vice president Mark Folk said Tolstedt is remaining with the company through December to help the transition process. Buffett has remained silent about the controversy thus far.
