BUSINESS

Wells Fargo CEO Stumpf To Forfeit $41 Million As Probe Launches After Fake Account Scandal

The announcement comes after Wells Fargo was hit $185 million in fines over a fake-account scandal.

Wells Fargo & Co said on Tuesday that it had launched an independent investigation into the firm’s retail banking sales practices.

Wells Fargo, the United States’ third-largest bank by assets, agreed to pay $190 million earlier this month to settle regulatory charges that some of its employees opened as many as 2 million accounts without customers’ knowledge, in order to meet sales targets.

Wells Fargo Chief Executive Officer John Stumpf would forfeit equity awards valued at about $41 million and will not receive a salary during the investigation, the company said.

Stumpf, a member of the board, has recused himself from the investigation, the bank said.

Lawmakers on the U.S. Senate Banking Committee grilled Stumpf about the accounts last week, with some calling on him to resign and forfeit his earnings and hold other senior executives accountable.

Former retail banking head Carrie Tolstedt has also left the company and will not receive severance pay.

Tolstedt has forfeited unvested equity awards valued at about $19 million and will not exercise her outstanding options during the investigation, Wells Fargo said.

The San Francisco-based bank has said it has fired 5,300 people over the matter and would eliminate sales goals in its retail banking on Jan. 1, 2017.

Wells Fargo has hired law firm Shearman & Sterling LLP to assist in the investigation.

 

(Reporting by Narottam Medhora in Bengaluru; Editing by Sandra Maler and Lisa Shumaker)

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