Wells Fargo (NYSE:WFC) CEO John Stumpf has apologised to customers after it was found that 2 million fake accounts were opened under their names.
Stumpf, who continues to deny mass fraud claims, stressed to the Senate Banking Committee on Tuesday that the bank did indeed plan to conduct an internal review and expand the existing process in order to properly examine accounts over the affected period.
Despite mounting pressure for Stumpf’s resignation, he has thus far refused to relinquish his position. Stumpf has nonetheless accepted responsibility for the scandal. During his testimony, he said he was “deeply sorry that we failed to fulfil our responsibility to our customers, to our team members, and to the American public”.
“I do want to make clear that there was no orchestrated effort, or scheme as some have called it, by the company”, he continued.
Despite Stumpf’s refutations, Senator and committee member Elizabeth Warren has labelled the scandal as a “staggering fraud”, and the committee have continued to pledge that they will take the appropriate disciplinary actions.
This is following intense scrutiny over the retirement of Carrie Tolstedt, who headed the division in which the false accounts were created. She is set to leave with around $124 million in both stocks and options. Stumpf suggested that Tolstedt “did not do enough” to resolve issues, and was indeed encouraged to resign by the board. There were also further indicators from Stumpf that the Wells Fargo board did intend to re-evaluate Tolstedt’s compensation in light of recent developments.
Recently, around 5,300 Wells Fargo employees were made redundant over their involvement in the creation of two million falsified accounts, which date back to 2011. Of these employees, it has been claimed that these misgivings arose following intense pressure for said employees to meet unrealistic sales targets.
The Justice Department has initiated multiple subpoenas to the bank, and the department is under particular scrutiny over how successfully it brings to justice Wells Fargo – and banking industry titans in general.
Researched and written by Nicole Jeary