The prevailing political mood is likely to become more clear when Wells Fargo CEO John Stumpf speaks next week before the Senate Banking Committee in Washington. Yet, a lot of employees say they were pressured to cross-sell products.
Advertisement
“The pattern of behavior that we’ve seen here is something that needs to stop”, he said during an appearance at a different New York City conference. “I am the leader”.
Not everyone in the financial industry accepts Stumpf’s assertion that Wells management knew nothing of the shady practices.
On Tuesday, Wells Fargo said it will eliminate all sales product goals for retail banking employees as of January 1.
Stumpf seems to be arguing that the fired employees responded to those pressures in a way that was out of line with Wells Fargo’s culture, but how much can you really blame them?
While in early stages, the investigation by federal prosecutors is focusing on whether someone senior within the bank directed employees to falsify documents in conjunction with the opening of accounts and products without consumers’ knowledge or authorization.
Olen said Stumpf’s denials “could come back to bite him” if the Securities and Exchange Commission decides to investigate Wells Fargo and finds evidence that contradicts his claims.
As bank customers across the country continued to fume Tuesday over news of Wells Fargo’s fraudulent accounts scandal, a House committee attacked the very law that guards against that kind of scheme.
It marked a significant shift by Wells Fargo, which prides itself on “cross selling” customers as many “products” – like checking accounts and debit cards – as possible. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.
Stumpf also pushed back on the idea that he should resign in the wake of the scandal, telling Cramer the best thing he can do right now is to lead the company.
Mr. Baker said: “We believe Street estimates are roughly 8% too high ($4.18 street vs. $3.83 PJC Est.) primarily due to elevated fee revenue and interest income growth”.
Investors are unlikely to take the news well, with reports saying that Berkshire Hathaway boss Warren Buffett is set to lose to $2bn as one of the bank’s biggest shareholders. “Comforting, perhaps, but what was in them before?” says Julie Ragatz, director of the Center for Ethics in Financial Services at The American College of Financial Services. The bank adopted a somewhat aggressive clawback provision in 2013 that would apply to Tolstedt as a highly paid executive.
Advertisement
However, media organizations have reported that Carrie Tolstedt, the bank executive who oversaw the unit that created the unauthorized accounts, is retiring from Wells Fargo with a golden parachute package of benefits worth $124.6 million.
