Business

Wells Fargo Investors Want Company Board To Do More After Scandal

REUTERS/Jim Young/File Photo

Daily Caller News Foundation logo
Robert Donachie Capitol Hill and Health Care Reporter
Font Size:

Four wealthy investors want the Wells Fargo board to make further changes following the nationwide banking scandal that ended in the resignation of CEO John Stumpf.

Wells Fargo got slapped with a $185 million fine from the Consumer Financial Protections Bureau (CFPB) in September for issuing 565,000 lines of credit and opening 1.5 million bank accounts for customers without their consent. Bank employees even went so far as to fake email addresses for their customers to sign them up for banking services in order to pad numbers. Some 14,000 of those credit accounts accrued over $400,000 in fees. (RELATED: CFPB Slapped Wells Fargo With $185 Million Dollar Fine)

Wells Fargo management responded by firing 5,300 employees who they blamed for the scandal, but these surface changes were not enough for customers or lawmakers.

Stumpf faced congressional investigation and a grilling from Senate leadership. Massachusetts Sen. Elizabeth Warren told Stumpf in a Congressional hearing: “You should resign. You should give back the money that you took while this scam was going on, and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.”

Following the congressional hearings, the Wells Fargo board ordered Stumpf to cough up $41 million in assets and earnings he accrued from his decades-long tenure at the bank. The board also cut some mid-level management.

Still unsatisfied, Stumpf announced he was stepping down as chairman and CEO Oct. 12.

Four shareholders want yet further actions to be taken to ensure a healthier future for the American banking institution, Reuters reports. The four Wells Fargo investors own a combined 71 million shares of stock in the bank and are worth about $3.7 billion.

Their chief criticism is that the bank took far too long to respond, and when it did respond, it missed the mark.

Another critique leveled by the investors involves the fact that the board was not transparent about who was directly involved scandal, arguing that there is too much ambiguity.

Together, these four individuals hold 1.4 percent of all operating stock in Wells Fargo. They have yet to decide if they will voice their concerns at the annual shareholders meeting in April, Reuters reports. One has hinted that they would like to see Warren Buffett added to the board. Buffett’s company is the largest investor in Wells.

Wells Fargo shares tanked during the unfolding saga of scandal and graft. The company lost 12 percent of its value during this period. Following news of President-elect Donald Trump’s victory over former Secretary of State Hillary Clinton stocks soared.

Follow Robert on Twitter

Send tips to robert@dailycallernewsfoundation.org

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.