John Stumpf, CEO of Wells Fargo, is one of the worst corporate villains since Jeff Skilling of Enron.
After firing 5,300 employees for creating 2 million fake customer accounts over a five-year period, Stumpf demonstrated a stunning lack of judgment by sweeping it under the rug and continuing to push an overly aggressive sales goal.
Getting grilled on Capitol Hill couldn’t have been easy, but that wasn’t the time to make an impression of a weasel.
The bank should pay the 2 million customers that it robbed, under the leadership of the thief Stumph, $1,000 each. It would add up to 200 million, which would nearly match the amount Wells Fargo paid to the Consumer Financial Protection Bureau as part of a $185 million settlement of charges that bank employees opened fee-generating accounts for unsuspecting customers. The Office of the Comptroller of the Currency received $35 million, while the city of Los Angeles got $50 million.
It would add up to 200 million, which would nearly match the amount Wells Fargo paid to the Consumer Financial Protection Bureau as part of a $185 million settlement of charges that bank employees opened fee-generating accounts for unsuspecting customers. The Office of the Comptroller of the Currency received $35 million, while the city of Los Angeles got $50 million.
But under the recent settlement, only $5 million was allocated for victimized customers.
The Wells Fargo “Wagon of Crooks!”
Stumpf should return “every nickel” he made during the scam and face a Department of Justice and US Securities and Exchange Commission investigation. He shouldn’t be afforded impunity (like other big bank CEOs) for running Wells during an ongoing crime spree.
There have been zero criminal indictments for any mega-bank CEO, regardless of the breadth, depth, and cost of the crimes committed by their institutions under their stewardships. Stumpf’s chances look pretty damn good.
Stumpf’s number two man, 29-year Wells veteran Timothy Sloan, is being touted as the anti-Stumpf; clean, not of the retail unit that swindled the bank’s average customers.
Only it wasn’t just the retail group implicated in settlements. Wells’s fines included $1.4bn for allegations of misleading investors in securities auctions, $5bn for loan services and foreclosure “abuses”, and $1.2bn for defrauding the US government regarding mortgages eligible for federal insurance.
Sloan’s roles spanned wholesale and commercial banking operations (areas implicated by these settlements.) Plus, as chief operating officer since November 2015, Sloan was responsible for ensuring good practices for that retail unit. Clean is relative. And meaningless.
The new board chairman, Stephen Sanger, said Stumpf “believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the Company forward.” Current challenges. That’s the kind of terminology that whitewashes the gravity of what he did.
If the Department of Justice had the balls, it would move forward with Stumpf’s criminal investigation and minimally slap him with an indictment. So far, it has not shown such aptitude.