20OCT16-Warren Questions ‘Proper Accountability’ at Wells Fargo

http://www.latimes.com/business/la-fi-wells-fargo-elizabeth-warren-20161020-snap-story.html

What did Wells Fargo’s new CEO know about the scandal? Senators push for answers

Two senators are pressing Wells Fargo & Co. about how much new Chief Executive Timothy Sloan knew about the unauthorized-accounts scandal that led to his appointment.

Elizabeth Warren (D-Mass.) and Robert Menendez (D-N.J.), outspoken critics of Wells Fargo, also want to know more about how much money former Chief Executive John Stumpf will get after resigning last week in the wake of the controversy.

“Given the scope of wrongdoing on his watch, Mr. Stumpf’s resignation is entirely appropriate,” the senators wrote in a letter Thursday to Stephen Sanger, who is the new chairman of Wells Fargo’s board of directors.

“But a resignation alone is not enough to assure proper accountability at Wells Fargo,” they said. “Instead, it raises additional questions.”
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California attorney general investigating Wells Fargo on allegations of criminal identity theft
California attorney general investigating Wells Fargo on allegations of criminal identity theft

The letter is another signal that Stumpf’s resignation didn’t end the problems stemming from the revelations last month in a $185-million settlement with Los Angeles City Atty. Mike Feuer and federal regulators that bank employees created as many as 2 million accounts without customer authorization.

The California Department of Justice is investigating allegations of criminal identity theft in the creation of the accounts, according to a search warrant and related documents sent to Wells Fargo that was obtained this week by the Los Angeles Times through a public records request.

U.S. attorneys in San Francisco, New York and Charlotte, N.C., also have opened investigations, as have two congressional committees.

And lawmakers continue to pound on Wells Fargo.

On Tuesday, Rep. Maxine Waters (D-Los Angeles) wrote to the Office of the Comptroller of the Currency requesting more information about the bank’s compliance with the Community Reinvestment Act, a federal law that includes fair lending and consumer compliance regulations.

Wells Fargo also has yet to respond to questions put to the bank last month by Warren, Menendez and other Democratic members of the Senate Banking Committee.

Following Stumpf’s Sept. 20 appearance before the committee, senators sent the bank dozens of questions, including whether unauthorized accounts might have been created earlier than 2009 and whether fraudulent sales practices took place in the bank’s other business units.
What is the Wells Fargo scandal?

Quick breakdown of the Wells Fargo scandal.

The Sept. 28 letter also targeted Stumpf and former community banking executive Carrie Tolstedt, demanding emails and other communications between those two related to unauthorized accounts.

Bank spokesman Mark Folk said Wednesday the bank is “working to respond to the inquiries we’ve received from senators and members of Congress.”

Warren and Menendez in their new request Thursday asked how the board decided to choose Sloan, a longtime Wells Fargo executive; whether he was questioned about his knowledge of the creation of unauthorized customer accounts; and any actions he might have taken in response.

The senators also asked if the board conducted “an independent investigation of whether Mr. Sloan knew about or took appropriate actions to prevent this scandal” and if so, what that investigation showed.

In announcing Sloan’s promotion Oct. 12, Wells Fargo said he had been with the bank for 29 years and “knows Wells Fargo’s operations deeply.”

“It is difficult to believe that he had no knowledge of or bears no responsibility for the actions of thousands of Wells Fargo employees creating fake accounts under his and other top executives’ watch,” Warren and Menendez wrote.

Sloan, who became president and chief operating officer in November, has said he was aware of the scandal as early as late 2013, when a Los Angeles Times investigation first publicly revealed the problems.

A Wells Fargo spokeswoman didn’t immediately respond to a request for comment on the latest letter.
Wells Fargo scandal
Wells Fargo scandal

The senators also raised questions about Stumpf’s retirement compensation.

Stumpf will not receive any severance, according to public filings. But he will retain more than $100 million in vested stock, plus accumulated pension and 401(k) benefits exceeding $24 million, the filings said.

Wells Fargo’s board announced last month that Stumpf would forfeit about $41 million in unvested stock awards and eligibility for an annual bonus, which had totaled $4 million for several years.

But Warren and Menendez asked whether the board would attempt to claw back more of Stump’s compensation and if he would “serve as a ‘consultant’ or in any other capacity for Wells Fargo or the board.”

The senators requested answers to their questions by Oct. 27 and a briefing by Nov. 3.

 

 

About arnierosner

As an American I advocate a republic form of government, self-reliance, and adherence to the basic philosophy of the founding fathers and the founding documents, I ONLY respect those who respect and "HONOR" their honor. No exceptions!
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