Senators heap criticism on Wells Fargo CEO, who apologizes

Public cynicism about major corporations hasn’t gone away since the Wall Street-induced recession of 2007-2008 and Wells Fargo has demonstrated why.

“Have you returned one nickel of the millions of dollars you were paid while this scam was going on?” she said. When Wells Fargo CEO John Stumpf testifies before a Senate committee hearing Tuesday, Sept. 20, 2016, it won’t be just his bank under fire for turning friendly branches into high-pressure sales centers. His company made worldwide headlines earlier this month when news broke that thousands of its low-level employees had opened up additional accounts for customers, without those customers’ consent-then charged them fees for the phantom accounts. In another report, CLSA analyst Mike Mayo also suggested Wells Fargo should reduce Stumpf’s compensation to hold him accountable for the bank’s practices.

“His response to questions remind me of Muhammad Ali’s rope a dope defense – he gets up against the ropes, he puts up his hands”.

In both cases, there are three accounts listed at TIAA that match those descriptions – and they all contain Wells Fargo as a top holding.

But the bank should have moved earlier to completely eliminate sales targets for retail bankers, a policy shift announced last week, he said.

Regulators continued to focus on Wells Fargo’s perceived weak internal controls, meeting repeatedly with the bank in 2014 and 2015, and issuing another supervisory letter in April 2015 regarding the Community Bank division and one directly to the CEO in June 2015 regarding the bank’s “enterprise-wide risk management and oversight of its sales practices”, Curry’s remarks noted, adding that a Notice of Deficiency was issued July 28 for failure to comply. “The fact that 5,300 employees were terminated was material, and that there were 2 million accounts involved would be material”. Wells never reached that level. Sherrod Brown of OH, the panel’s top Democrat, told Stumpf.

“When thousands of people conduct the same kind of fraudulent activity, it’s a stretch to believe that every one of them independently conjured up this idea of how they would commit this fraud”, said Sen.

Executives have pointed out that while thousands of employees set up accounts without customers’ authorization over five years, they represent a tiny fraction of total staff.

“The only way that Wall Street will change is if executives face jail time when they preside over massive frauds”.

“Okay, so you haven’t resigned”, Warren said during the Senate Banking Committee hearing. Elizabeth Warren emphasized the hollowness of his statements.

The Department of Justice and Federal Bureau of Investigation also have launched probes into the bank’s actions following Wells’ settlement with the Consumer Financial Protection Bureau and Los Angeles city attorney.

Warren cited calls to shareholders from 2012 to 2014 in which she said Stumpf touted high cross-selling numbers. “The share price during this time period went up by about 30 dollars, which comes out to more than 200 million in gains – all for you personally!” But Stumpf started to redirect the blame saying the fake accounts were opened by 1 percent of Wells Fargo personnel and- He was interrupted again by the Senator.

Peppered with criticism for almost three hours, Stumpf appeared taken aback by the intensity of the verbal lashing. While some lawmakers grilled Dimon over the incident, others apologized for questioning him or sought his opinion on subjects including regulation and the national budget.