November 10, 2016
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Senators Want to Know: Who's Actually Being Held Accountable at Wells Fargo?

Elizabeth Warren asks: Has Wells Fargo CEO John Stumpf "profited from the bank's fraud"?

By Deirdre Fulton,

When Wells Fargo CEO John Stumpf stepped down last week, Sen. Elizabeth Warren said it wasn't "real accountability" given the scope of the financial institution's fake-account scandal.

Now, Warren and her colleague Sen. Robert Menendez (D-N.J.) are doubling down on that accusation, saying the recent fallout has merely raised "additional questions...about who is being held accountable at Wells Fargo."

In a letter (pdf) sent Thursday to the bank's new board chairman Stephen Sanger, Warren and Menendez demand answers to those questions. They inquire not only about Stumpf's compensation—pay, bonuses, and stock holdings—but also about his replacement, Wells Fargo insider Tim Sloan.

Noting Sloan's long tenure with the company (as others did in the wake of his appointment), the senators write: "It is difficult to believe that he had no knowledge of or bears no responsibility for the actions of thousands of Wells Fargo employees creating fake accounts under his and other top executives' watch."

The letter reads:

If Mr. Stumpf is allowed to walk away with tens of millions of dollars in compensation that he received while bank employees were engaging in widespread fraudulent activity, then he has profited from the bank's fraud. And if Mr. Stumpf is simply replaced by another top company executive who was aware of, but did nothing to prevent the widespread fraud that harmed hundreds of thousands of Wells Fargo customers and shareholders, then the bank is turning its back on accountability.

Warren and Menendez then ask for written answers to the following questions by October 27:

  1. Did the Wells Fargo Board of Directors make any agreements with Mr. Stumpf related to his retirement and his compensation?
  2. Will Mr. Stumpf be receiving the $24 million "supplemental cash balance plan" as a retirement benefit? Will he receive any other retirement benefits?
  3. Does he remain eligible for any additional compensation related to his service at Wells Fargo?
  4. Does Mr. Stumpf's decision to retire have any impact on the board's ability to claw back any of his previous compensation?
  5. Will Mr. Stumpf serve as a "consultant" or in any other capacity for Wells Fargo or the Board?
  6. How did the board conduct it search for a successor to Mr. Stumpf? Did the board consider applicants other than Mr. Sloan, and if so, how did the board identify those applicants?
  7. Did the board ask Mr. Sloan about his knowledge of the false account scandal prior to elevating him to CEO?
  8. Did the board ask Mr. Sloan if he took any action in response to the false account scandal?
  9. What information did Mr. Sloan provide to the board in response to these queries?
  10. Did the board conduct an independent investigation of whether Mr. Sloan knew about or took appropriate action to prevent this scandal?
  11. What were the findings of this investigation?

Meanwhile, Wells Fargo continues to take heat from other corners, as well. As the Los Angeles Times reported Thursday:

The California Justice Department is investigating allegations of criminal identity theft in the creation of the accounts, according to a search warrant and related documents sent to Wells Fargo that were obtained this week by the Los Angeles Times through a public records request.

U.S. attorneys in San Francisco, New York, and Charlotte, N.C., also have opened investigations, as have two congressional committees.

Several cities and states have also taken steps to cut ties with the bank, and this week, Wells Fargo lost its Better Business Bureau accreditation.

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