Wells Fargo

Elizabeth Warren eviscerates Wells Fargo CEO John Stumpf

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• published: 21 Sep 2016
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Elizabeth Warren destroys Wells Fargo CEOJohn Stumpf and urged him to resign and face a criminal investigation 'You should resign and be criminally investigated': Elizabeth Warren blasts Wells Fargo CEO's 'gutless leadership' in wake of bogus account scandal Wells Fargo's John Stumpf spoke on Capitol Hill about its recent scandal Employees had opened 2m fake accounts to meet high sales targets He said they'd fired 3,500 staff who had done that and changed their rules But Warren savaged him, saying he was throwing staff under the bus He and other execs should pay back money they were paid, panel said Former exec Carrie Tolstedt received a $125m retirement package She was in charge of community banking for Wells Fargo Senator Elizabeth Warren savaged Wells Fargo chief executive John Stumpf's 'gutless leadership' on Capitol Hill Tuesday as he answered questions about the bank's bogus account scandal. Warren (D-MA) excoriated Stumpf for what she saw as a failure to take responsibility for the work atmosphere that led to employees creating more than 2million unauthorized accounts to meet sales targets. 'This is about accountability,' Warren said, adding that he should pay back money and resign - and, she added, 'you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.' Savage: Elizabeth Warren savaged Wells Fargo CEO John Stumpf Tuesday, saying he should take responsibility for his bank's recent scandal, resign and face a criminal investigation 'Gutless': Stump was criticized for 'gutless leadership' in the rant, which came after 3,500 Wells Fargo employees were fired for starting more than 2million bogus accounts The bank was fined $158million earlier this month after it emerged that employees had created 1.5million checking and savings accounts and 500,000 credit card accounts to meet high sales targets. Stumpf, who appeared with a bandage on his hand - a result of playing with grandkids, according to CNBC - said the bank had addressed the problem as it learned of the bogus accounts, firing 5,300 employees over a five-year period. It also made some incremental policy changes, such as reducing the link between sales goals and compensation, he said. He also admitted that the bank should have eliminated sales targets for retail bankers, a policy shift announced last week, sooner. And he promised that customers whose credit ratings had been damaged by bogus accounts would be compensated. 'I apologize to all of the American people and our customers, and I will make it right,' he said. But Warren wasn't impressed by what she saw as Stumpf throwing lower-level staff under the bus while he and other executives shirked blame. 'This just isn't right,' she said. 'A cashier who steals a handful of $20s is held accountable, but Wall Street executives almost never hold themselves accountable, not now and not in 2008 when they crushed the worldwide economy.' Problems: Stumpf who had hurt his hand playing with grandkids, said the bank addressed the problems but admitted it hadn't gone far enough soon enough She blamed Stumpf and other executives for creating a system in which low-paid employees were incentivized to cheat, even if employees were never told by senior executives to do so. The senator also noted that Wells Fargo had touted its strong sales results as key to boosting its share price, helping to lift Stumpf's personal wealth by more than $200million, according to her estimates. Warren wasn't alone in her condemnation. After Stump apologized, members of the powerful Senate Banking Committee called on Stumpf to use Wells Fargo's own rules to 'claw back' compensation from top executives allegedly responsible for the scandal. Clawback: The panel said the company should claw back money from Stumpf and other execs, which it has the right to do. Stumpf said that was for an independent HR committee to decide The hearing focused on a former senior executive in community banking, Carrie Tolstedt, who left the bank recently with a reported $125million retirement package as regulators were probing the bogus accounts. 'To not invoke some kind of clawback for yourself and others is a malpractice just from the standpoint of public relations,' said Republican Senator Bob Corker. Stumpf declined to offer an opinion on whether he, Tolstedt or other top executives should be forced to pay back compensation. 'I'm not on the human resources committee,' Stumpf said. 'It's an independent committee. They will take under deliberation.' He said some members of senior executive management had suffered financial consequences and could face additional penalties. These include officials in charge of risk in the retail bank and regional presidents, he said. Payout: Carrie Tolstedt was a senior executive in community banking but retired - reportedly getting a $125m package - as regulators investigated. She should return money, the panel said