Wells Fargo Orders Two Former Executives to Pay Back 75 Million: The Hill

[Stuart G]

http://thehill.com/policy/finance/328139-wells-fargo-orders-two-former-executives-to-pay-back-75-million
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An incredible story of corporate greed led by 2 former top executives..Sales techniques were used that were illegal and unethical. Great pressure on employees to meet sales goals. It did not matter how, just meet them.. Some employees at community banks opened accounts of customers without approval or even telling the customers.. __________________________________________________________________________________________

By Vicki Needham - 04/10/17 02:48 PM EDT

Wells Fargo is ordering two top former executives to return another $75 million in pay after a sweeping six-month investigation found they encouraged an aggressive sales culture and failed to take action or realize the widespread scope of the ensuing fraudulent behavior.

Former CEO John Stumpf, who left the bank in October, will pay an additional $28 million, while the former head of community banking, Carrie Tolstedt, will return $47 million in stock options on top of the $19 million she agreed to pay back after stepping down last year, according to a report by the Wells board of directors.

Stumpf had already agreed to return $41 million in pay after it was revealed that he failed to stem the tide of a pervasive business culture that put pressure on employees to meet aggressive sales goals and led many to open unauthorized accounts.

The scathing 110-page internal report, compiled by the law firm Shearman & Sterling, concluded that the “cause of sales practice failures was the distortion of the community bank’s sales culture and performance management system, which, when combined with aggressive sales management, created pressure on employees to sell unwanted or unneeded products to customers and, in some cases, to open unauthorized accounts.”

The bank's corporate structure gave too much power to the community bank’s senior leadership, who the report concluded were "unwilling to change the sales model or even recognize it as the root cause of the problem."
"Community bank leadership resisted and impeded outside scrutiny or oversight and, when forced to report, minimized the scale and nature of the problem," the report said.

[Angry Dragon]

1. I heard on the radio today this had been going on for 15 years ............

[Stuart G]

2. The full report says that the CEO,

knew of examples of this in 2002 or 2004. At that time this was not system wide, as it became later. The report says that community banking division, that carried this out, was "insulated" from other divisions, and never owned up to what was going on. That division was making lots of money,, so what did it matter?..
In fact, at one point, CEO, John Stumpf, called the head of community banking, Carrie Tolstedt, "The Best Banker in America.

More info on this story:

Following the revelations last summer that thousands of Wells Fargo employees fraudulently opened two million unauthorized accounts for customers.......

two million accounts...??