Wells Fargo engaged in a massive, years-long bank fraud scam that affected millions of customers. As previously reported, the bank has fired over 5K employees who created fake accounts and moved funds around without the permission of its customers. This includes employees who have come forward stating that they were pressured by supervisors to engage in the massive fraud. So far, the outrage over these criminal actions has been minimal but now two top level executives are going to take a hefty hit to the wallet.
John Stumpf, CEO of Wells Fargo, will now forfeit his salary and bonuses that included an estimated $41M in stock awards for his role during the fraud. While Wells Fargo investigates itself, Stumpf will remain on board and work without a salary, the bank’s independent directors announced this week.
In addition, Carrie Tolstedt, who led Wells Fargo’s community banking division responsible for the massive fraud, will now be leaving Wells Fargo ahead of her scheduled departure at the end of this year. Tolstedt will not receive a severance package and will have to forfeit an estimated $19 million of unvested stock awards she received. Tolstedt has agreed not to exercise another $34 million in stock options. When Tolstedt leaves the bank, she will still walk away a rich woman with an estimated $77 million in stocks and options if the bank takes no further action against her.
The actions against these two executives, however, pale in comparison to what happened with workers who protested the actions of the bank. The US Department of Labor is reviewing open and closed complaints of workers who say they suffered retaliation from Wells Fargo for reporting its fraudulent actions. Some workers who called the bank’s ethics hotline claim they were fired and denied wages. The US Labor Department is now reviewing cases that go back to 2010 even if they have been closed or settled. Affected workers have filed a $7.2 billion class action lawsuit seeking damages against the bank. In addition, the government has established a toll-free hotline (1-866-4USADOL) and email address ([email protected]) for current and former employees who believe they were affected by the bank’s actions.