Wednesday, October 12, 2016

THE HEADLINE SHOULD READ - STUMPF ARRESTED

Here we go again. Another slap on the wrist and a "golden handshake" where another Wall Street bankster walks away with millions of dollars after committing numerous crimes against numerous Americans which will go unpunished.

Where is Obama"s DOJ? Not a peep.

Where is Hillary? Not a peep.

This again shows how justice in America is doled out, and it's not pretty.

Wells Fargo announced Wednesday that its longtime chief executive and chairman, John G. Stumpf, is stepping down, the latest turn for the embattled megabank after it admitted that thousands of low-level employees had set up sham accounts to meet sales quotas.

Stumpf’s sudden downfall is likely to send shivers through Wall Street where a well-honed playbook for surviving public scandals appears to have been torn to pieces, upended by the type of populist anger that has fueled the rise of Republican Donald Trump and Sen. Bernie Sanders (D) on this year’s presidential campaign trail.

The San Francisco-based bank has repeatedly apologized and said it had fired 5,300 employees for misconduct and put in place more stringent internal controls. But that has not been enough for regulators and lawmakers, including Sen. Elizabeth Warren (D-Mass.), who called on him to resign. Stumpf went as far as pledging to give up $41 million in compensation to account for the scandal, but his overture did little to quiet critics.

“While I have been deeply committed and focused on managing the Company through this period, I have decided it is best for the Company that I step aside,” Stumpf said in a statement.

Tim Sloan, another long-time Wells Fargo executive, will take over Stumpf’s duties as CEO. A board member, Stephen Sanger, will now serve as chairman, effectively dividing power that had previously been consolidated under Stumpf. Sanger is the former chief executive of General Mills.

“It’s sad day for Wells Fargo. John Stumpf was a successful leader for his entire career” notwithstanding the recent controversy, Sloan said in an interview. “He did the right thing for Wells Fargo by putting the company first and himself second.”

“I wish the transition was happening” under different circumstances, Sloan added. “I am going to do the right thing by repairing the reputation of the company.”

Stumpf’s downfall began in early September when Wells Fargo was fined$185 million by regulators after it discovered that thousands of employees were setting up unauthorized accounts, including credit cards and checking accounts, customers had not requested. In some cases, the customers were charged various fees for accounts they did not know existed. In others, bank employees would take money from authorized accounts to gain credit for setting up fake ones.

The company initially attempted to downplay the problem, noting that the 5,300 employees fired over five years totaled only a small portion of its workforce. But that just stoked lawmakers’ anger and the scandal continued to grow. Federal prosecutors are now considering criminal or civil charges against the company, the Labor Department is investigating whether it illegally fired employees who reported the wrongdoing and several cities and states, including California, have said they would no longer do business with the bank.

Stumpf will not receive a severance package as part of his retirement. But he has accumulated $137.1 million in company stock, deferred compensation and a pension, according to Equilar, a research firm. His departure is a stunning end to the career of one of the financial industry’s most-storied executives.


Wells Fargo CEO steps down in wake of sham accounts scandal - The Washington Post: Wells Fargo CEO steps down in wake of sham accounts scandal - The Washington Post -
https://www.washingtonpost.com/news/business/wp/2016/10/12/wells-fargo-ceo-to-retire-in-wake-of-sham-accounts-scandal/