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Wells Fargo top execs walk away rich in scandal, workers suffer reprisals

Wells Fargo Logo (Photo Source: Twitter/ Wells Fargo Verified account @WellsFargo)

Wells Fargo Logo (Photo Source: Twitter/ Wells Fargo Verified account @WellsFargo)

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.

1 Comment

  1. Mike Kisselstein on September 28, 2016 at 3:19 pm

    Claw Back the Moral High Ground

    Over the course of a 5-year period Senior management at Wells Fargo Bank ratcheted up the sales pressure on front line staff to a point where they opened 2 million fraudulent accounts to meet oppressive sales goals. Senior management boasted of their sales performance and that inflated stock prices as well as senior management compensation. When it was announced that Wells Fargo had practiced systemic fraud, they reported that they had terminated 5300 employees implying that they had taken appropriate actions against the perpetrator bad apples. A $2.6 billion September 22, 2016 class action filed by two ex-employees suggests that a majority of the 5300 terminated employees had refused to participate in the fraud and were terminated for failing to meet oppressive goals.

    Today the Wells Fargo board announced that they would claw back approximately $60 million in senior management compensation. Stockholders should not be paying any part of the $185 million federal fine for their gross and systematic malfeasance. Clawbacks in cases of this nature need to be sufficient to cover the direct expense and the long term reputational damage to the company. These greedy banksters feed their greed by browbeating their low level employees into victimizing their customers. Wells Fargo is emblematic of the moral bankruptcy which plagues America. Too little too late, but a start.