October 20, 2016

Senators Warren and Menendez Raise Questions about Retirement of Wells Fargo CEO John Stumpf, Promotion of New CEO Tim Sloan

Text of the letter available here (PDF)

Washington, DC - Today, U.S. Senators Elizabeth Warren (D-Mass.) and Bob Menendez (D-N.J.) wrote to the Wells Fargo Board of Directors to raise concerns related to last week's announcement of the retirement of former Wells Fargo Chairman and CEO John Stumpf and the promotion of Tim Sloan as the company's new CEO.  The moves were made in the wake of Wells Fargo's admission of fraudulent behavior involving the creation of more than two million fake consumer bank and credit card accounts and its settlement of nearly $200 million with the Consumer Financial Protection Bureau's (CFPB) and other regulators.

"Given the scope of wrongdoing on his watch, Mr. Stumpf's resignation is entirely appropriate," wrote the senators. "But a resignation alone is not enough to assure proper accountability at Wells Fargo.  Instead, it raises additional questions."

First, the senators explained that Wells Fargo's announcement leaves unanswered questions about Mr. Stumpf's compensation and whether he will receive any other retirement-related payments. Second, they raised concerns that the announcement of Mr. Sloan as the new CEO does not explain "if the Board has properly addressed the question of whether [he] ... knew about or played any role in the scandal."

The senators' letter continues, "we continue to have questions about who is being held accountable at Wells Fargo.  If Mr. Stumpf is allowed to walk away with tens of millions of dollars in compensation that he received while bank employees were engaging in widespread fraudulent activity, then he has profited from the bank's fraud.  And if Mr. Stumpf is simply replaced by another top company executive who was aware of, but did nothing to prevent the widespread fraud that harmed hundreds of thousands of Wells Fargo customers and shareholders, then the bank is turning its back on accountability." The letter requests that the Wells Fargo Board provide answers to a series of questions about the senators' concerns.

A PDF copy of the letter is available here.