September 20, 2016

Senator Warren: Wells Fargo CEO Skirts Accountability by Blaming Scam on Low-Level Employees While Pocketing Millions

Stumpf personally touted bank's strong cross-sell numbers from high sales quotas as reason to buy Wells Fargo stock

Warren Asks if Wells Fargo Will Claw Back Compensation for Senior Executives, Including Carrie Tolstedt 

Video from the hearing available here 

WASHINGTON, DC – At today’s Senate Banking Committee hearing, United States Senator Elizabeth Warren (D-Mass.) questioned Wells Fargo Chairman and CEO John Stumpf about his unwillingness to hold himself or senior executives accountable for the recent fraud that resulted in a $185 million settlement with the Consumer Financial Protection Bureau (CFPB) and the firing of more than 5,000 employees.

“You haven’t resigned.  You haven’t returned a single nickel of your personal earnings.  You haven’t fired a single senior executive.  Instead, your definition of ‘accountable’ is to push the blame to your low-level employees who don’t have money for a fancy PR firm to defend themselves. It’s gutless leadership,” the senator said.

Senator Warren highlighted Wells Fargo’s longtime emphasis on cross-selling, noting that while other banks average fewer than three accounts per customer, Wells Fargo set its target at eight accounts. The senator explained that while the scam was ongoing, Stumpf repeatedly referenced Wells Fargo’s success at cross-selling during earning calls as one of the main reasons to buy stock. Additionally, the value of Wells Fargo stock personally held by Stumpf increased by more than $200 million during this time.  The transcripts of quarterly earning calls from 2012 to 2014, as well as reports from analysts recommending that people purchase Wells Fargo stock in part because of the strong cross-sell numbers, are available at

“If one of your tellers took a handful of $20s from the cash drawer, they’d probably be looking at criminal charges for theft.  They could end up in prison.  But you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket,” Senator Warren said.  “This is about accountability. You should resign, you should give back the money you took while this scam was going on, and you should be criminally investigated.”

The senator further pressed Stumpf about whether he considered firing Senior Executive Vice President of Community Banking Carrie Tolstedt instead of allowing her to retire and walk away with tens of millions of dollars in additional compensation. Stumpf acknowledged that he was aware of the misconduct occurring in Tolstedt’s division through the time in which the misconduct occurred, but said he had not considered firing Tolsted and refused to comment on whether he supports clawbacks.   

Watch video of Senator Warren’s questioning of Stumpf here.