The former head of Wells Fargo who presided over the bank's cross-selling scandal has been barred from ever working for a bank, federal officials announce
The once-thriving San Francisco-based banking giant has experienced sluggish demand for its services since the scandal first came to light in 2016. It has paid $185 million in fines for unethical sales practices that included opening around 3.5 million fake accounts without customer authorization. It has also settled a $110 million class-action lawsuit and is currently facing a slew of lawsuits that could total $3 billion.
, not long after facing blistering questions from congressional panels. The bank has since cycled through several senior executives and CEOs. An investigation by the bank's own board in 2017 blamed top management for creating an"aggressive sales culture" that led to the phony accounts. Wells' board singled out Stumpf and Tolstedt, saying both executives dragged their feet for years regarding problems at what was then the second-largest U.S. bank, and were ultimately unwilling to accept criticism that the bank's sales-focused business model was failing.
Many current and former employees talked of intense and constant pressure from managers to sell and open accounts, and some said it pushed them into unethical behavior. The report backs up those employees' accounts. The board also found that Stumpf was unwilling to change Wells' business model when problems arose.
"His reaction invariably was that a few bad employees were causing issues ... he was too late and too slow to call for inspection or critical challenge to basic business model," the board said.
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