BROWSE BY TOPIC
Stories of Interest
- Stephen Hicks Barred for Defrauding His CT Hedge Funds - SEC
- Barclays CEO Staley Sees Pay Decline - Frankly, He's Lucky to Still be Employed
- Barclays Female Investment Bankers Earn 21% Less in Bonuses than Male Counterparts
- FINRA Eliminates $400 Fee for Explained Arbitration Decision
- SEC Adopts Statement and Interpretive Guidance on Public Company Cybersecurity Disclosures
- SEC Charges Former Bitcoin Exchange and Its Founder With Fraud
- JPMorgan Chase to Replace NYC Headquarters with 70-Story Skyscraper
- Citigroup Raises CEO Corbat's Pay 48% to $23Mn
- Should Congress Create a Crypto-Cop?
- JPMorgan Weighs Buying an Exchange-Traded Funds Firm
- Hey, Goldman Sachs: Wanna Buy BNY Mellon?
- SEC Order Rejecting Acquisition of Chicago Stock Exchange (CSX) by Chinese-Baesd Company
- Kyle Moffatt Named Chief Accountant in SEC CorpFinance
- SEC Suspends Trading in 3 Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
- Karen Garnett, Assoc. Director of SEC CorpFinance, to Leave After 23 Years of Service
- Louisiana Adviser Barred for Hiding Losses from Investors
- Connecticut HF Manager Illegally Diverted Investor Money - Now Owes Nearly $13Mn
- White House Cleaning House of Advisors Without Full Security Clearance
- Goldman Projects 30% Growth in Wealth Management Advisor Force
- Whistleblower Alleges Manipulation of CBOE Volatility Index
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
$75 Million Claw Back at Wells Fargo
[Photo: Wells Fargo Ex-CEO John Stumpf]
Former Wells Fargo CEO John Stumpf and former head of the bank’s retail division, Carrie Tolstedt took a combined retirement haircut of more than $75 million, following the release of a long-awaiting internal report by the bank’s board of directors.
- John Stumpf will forgo $28 million of his 2015 bonus that was paid in March 2016.
- Carrie Tolstedt was retroactively terminated for cause, and will forfeit $47.3 million in outstanding stock options.
The 110-page report contained the findings of an investigation carried out by a special board committee headed by Wells Fargo Chairman Stephen Sanger and 3 other independent directors. Shearman & Sterling assisted. Most of the blame for the sales scandal was directed at Ms. Tolstedt and her team. Among other things, they were accused of cultivating a bank culture that led to the sales scandal, and they ignored the systemic nature of the problem.
Tolstedt was further accused of obstructing the board’s efforts to get to the bottom of what was going on. She reportedly hid the scale of the misconduct from the board, which only discovered that 5,300 staff had been fired for opening more than 2 million unauthorized accounts when the bank reached a $185 million settlement with regulators in September last year.
"Even when challenged by their regional leaders, the senior leadership of the Community Bank failed to appreciate or accept that their sales goals were too high and becoming increasingly untenable."
"It was convenient instead to blame the problem of low quality and unauthorized accounts and other employee misconduct on individual wrongdoers."
"Effect was confused with cause. When Wells Fargo did identify misconduct, its solution generally was to terminate the offending employee without considering causes for the offending conduct or determining whether there were responsible individuals who, while they might not have directed the specific misconduct, contributed to the environment that increased the chances of its occurrence."
The report was also critical of Stumpf, who was described as blinded by Wells Fargo’s cross-selling success and his refusal to believe that the model was seriously impaired. Stumpf went so far as to describe Tolstedt as “the best banker in America.”
TIM SLOAN UNSCATHED. Tim Sloan, who succeeded Stumpf as CEO, is described in the report as having little contact with sales practices at the bank before becoming COO and Tolstedt’s boss in November 2015. Six months later he told her to step aside.