Well Fargo’s shares have lost about 6 percent of their value since last week, when US regulators unveiled the fines. The elimination of the sales goals, effective January 1, follows instructions from the lender to US call center workers to temporarily halt cross-selling of financial products.
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A third-party consultant examined more than 82 million deposit accounts and about 11 million credit-card accounts opened since 2011, Shrewsberry said. “Outside of this one wildly stupid act of greed, on the part of the CEO, Wells Fargo is a pretty smart organization in terms of it’s business model and how it has executed historically”, Schiffer tells TheDCNF.
Carrie Tolstedt, 56, announced her retirement in July, effective at the end of the year, and is set to receive $124.6 million via stock, options and restricted shares accrued during her 27 years at Wells Fargo, Fortune reported Monday.
San Francisco-based Well Fargo settled claims that its sales employees opened more than 2 million unauthorized new accounts for customers in order to meet sales quotas and earn bonuses.
Tolstedt’s salary is $1.7 million. She’ll also get $3.07 million in retirement benefits, according to data compiled by Bloomberg. She was paid around $9 million for her fantastic job. California authorities accounted for the rest. Customers were then sometimes hit with assorted fees for accounts they didn’t know they had, the regulators charged.
As for the firings, a Wells Fargo spokesperson said, “The actions we have taken with respect to team members and managers reflect our commitment to monitoring and addressing any inappropriate sales conduct”.
Tolstedt led the Wells Fargo division that created the false accounts in question and in the past her pay was linked to “cross selling”.
“The pattern of behavior that we’ve seen here is something that needs to stop”, he said during an appearance at a New York City conference.
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. What’s key here is the central role that the protection bureau, created under the Dodd-Frank legislation, played in bringing Wells Fargo to account.
The investigation is being conducted by the U.S. Attorney’s Offices for the Southern District of NY and the Northern District of California, the WSJ said.
For the first time since the financial crisis, the most toxic bank in America is nowhere near Wall Street.
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Wells Fargo has said it’s responded to the scandal by investing in compliance measures like secret shoppers and more oversight.
