Wells Fargo announced Tuesday it would eliminate product sales goals for retail bankers, one of several recent measures it has taken to try and get in front of a gathering public storm over the sales scandal.
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Wells Fargo is being asked to turn over documents related to the scandal. It will also pay restitution to affected customers. Fortune reported on Monday that the executive who head of the division that at the center or the settlement, Carrie Tolstedt, left the bank in July with almost $125 million in stock, options and restricted shares. She announced her retirement in July at age 56 and was scheduled to retire at year’s end, according to a release by the bank.
As a parting gift, Tolstedt will earn a purported $125 million payday, the lion’s share of which stems from the exercise of stock awards that she received from the bank along the way. Tolstedt could not be reached.
Torrie Matous, spokeswoman for the committee’s chairman, Richard Shelby, a Republican from Alabama, said staff had “been arranging briefings and collecting information from both Wells Fargo and the regulators” to prepare for a September 20 hearing. The phantom accounts resulted in some customers being hit with fees for insufficient funds. Wells Fargo also said that it had fired 5,300 employees over the sales conduct.
The Department of Justice has issued subpoenas to Wells Fargo over the opening of millions of fake accounts at the bank, a US official told CNN.
Well Fargo made a profit of R286 billion ($20 billion) in 2015.
At the center of the bad behavior appears to be an effort by the bank to persuade customers to sign up for multiple products, known as “cross selling”. A customer who opened a checking account would be encouraged to consider a debit card or savings account.
Warren Buffett’s Berkshire Hathaway, the largest shareholder of the bank, can not be pleased with the negative publicity.
“We don’t comment on the existence or non-existence of any investigation”, said Abraham Simmons, a spokesman for the U.S. Attorney’s Office in San Francisco.
Richard Cordray, director of the CFPB, told CNBC earlier this week that he does not believe Wall Street has a systemic problem with regard to retail staffers committing fraud to meet performance objectives, adding that he and other regulations will remain vigilant investigating banks.
Wells Fargo’s downtown Mobile office is pictured Tuesday, Feb. 22, 2011, in Mobile, Ala.
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Walking the talk? Sure, Wells Fargo repeatedly receives high rankings from the Human Rights Campaign, the largest LGBT advocacy group and political lobbying organization in the United States. In response to a question over whether the bank is reserving for additional settlements on the issue, he said: “With respect to this matter, this is all you need to know”.
