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Elizabeth Warren Wants More From Wells CEO

October 21, 2016

Sen. Elizabeth Warren (D-MA) has the momentum and she wants more.  More than the sudden resignation of former Wells Fargo CEO John Stumpf. 


Warren, who famously called Stumpf "gutless" while saying he should resign, now wants to know whether new Wells Fargo CEO Tim Sloan was aware of the bank's fake account scandal.  And if he was, what did the longtime Wells Fargo exec do about it?


The Massachusetts senator asked these questions in a letter she and NJ Senator Bob Menendez fired off on Thursday to Stephen Sanger, the new chairman of Wells Fargo's board.  Warren wants Wells Fargo to explain if Sloan "played any role in the scandal."  She also wants to know if the board considered hiring anyone else.


Cowen analyst Jaret Seiberg sees the letter from Warren as a "threat to Mr. Sloan's future as CEO" and called it a "make or break moment."  The key, Seiberg wrote in a research report, will be whether Sloan can convince lawmakers he did not "tacitly condone" illegal activity.


Sloan has had a 29-year career at Wells Fargo, but much of that was not at the company's retail bank, where the problems occurred.  Only since November 2015 did Sloan oversee community banking in his role as president and COO. Sloan also did stints as CFO and CAO.


In response to Warren's letter, the board reiterated to CNNMoney it is prepared to "take additional actions" if they are "warranted" by the findings of the investigation. The board said that includes potential clawbacks of compensation already paid out.


Warren asked for a written response from Wells Fargo by October 27 and a briefing no later than November 3.