Since Wells Fargo’s practice of opening bogus accounts in customers’ nameswas first exposed, reports of the boiler room-like sales culture that led to the scheme have leaked out of the bank. In recent weeks, that trickle has turned into a flood as more and more bankers have come forward, including one former employee who says she drank “at least a bottle” of hand sanitizer each day to deal with the pressure.
Among other unethical practices, former banker Angie Payden claims she was forced to sell customers unnecessary financial products she knew they couldn’t afford and coerce them into opening new accounts by claiming old ones had been compromised. Eventually, Payden says, she could no longer take the periodic panic attacks and “extreme physical stress-related symptoms” of her job. From The New York Times:
One morning, before meeting with a customer, in which I knew I was going to have to sell unneeded services, I had a severe panic attack. I went to the bathroom and took a drink of some hand sanitizer.
This immediately reduced my anxiety. From that point, I began drinking the hand sanitizer all over the bank.
In late November 2012, I was completely addicted to hand sanitizer and drinking at least a bottle a day during my workday. In December, I was confronted by management about my behavior. I decided to seek treatment and went on leave.
Sen. Elizabeth Warren is stepping up her pressure on Wells Fargo, questioning the bank’s decision to name an insider its new CEO and asking whether more compensation will be stripped away from its former chief executive.
Warren, a Massachusetts Democrat who during a Senate hearing last month grilled then-CEO John Stumpf, says in a letter Thursday that Stumpf’s resignation last week over a bogus-accounts scandal “raises additional questions.” Sen. Robert Menendez, a New Jersey Democrat, also signed the letter to the San Francisco bank’s new chairman, Stephen Sanger.
The letter says it’s unclear if the bank’s board has properly addressed the question of whether new CEO Tim Sloan “knew about or played any role in the scandal.”
A 29-year company veteran, Sloan’s career included serving as chief financial officer from 2011 to 2014, when he was named head of wholesale banking. In November, Sloan took on the additional titles of president and chief operating officer.
“Carrie Tolstedt, the former head of retail banking at Wells Fargo, reported directly to Mr. Sloan beginning in November 2015. And last week, Mr. Sloan admitted that he was aware of the reports of fraudulent activity by bank staff as early as 2013,” the letter says.
MANHATTAN (CN) — An independent monitor must keep watch over Deutsche Bank after a five-day systems outage revealed the German lender to be unprepared for such disasters, a federal judge ruled Thursday.
The Commodity Futures Trading Commission, empowered under the Dodd-Frank Wall Street Reform and Consumer Protection Act to bring more transparency to swap dealers, imposed a $2.5 million fine on Deutsche Bank a little more than a year ago for its failure “to properly report its swaps transactions from in or about January 2013 until July 2015.”
The agency’s order forced the bank to comply with remediation efforts, including beefing up reporting requirements and submitting periodic updates.
Then, Deutsche Bank’s swap-data reporting system crashed on April 16.
The CFTC responded with a Manhattan Federal Court lawsuit claiming the incident amplified old problems and created news ones.
“Deutsche Bank’s subsequent efforts to end the system outage repeatedly exacerbated existing reporting problems and often led to the discovery or creation of new reporting problems, many of which violate a previous CFTC order,” the complaint said.
U.S. District Judge William Pauley called the consequence “significant” for the markets in a 5-page ruling published Thursday.
“You should resign, you should give back the money, and you should be criminally investigated.” a fiery Senator Elizabeth Warren told
Wells Fargo’s chief executive, John G. Stumpf, during Senate hearings last month
In September, Wells Fargo reached a $185 million settlement with federal regulators and acknowledged that thousands of employees, under intense pressure to meet aggressive sales targets, opened as many as two million bogus accounts without customers’ knowledge, in some cases forging signatures. John G. Stumpf, the bank’s former chief executive, declared that the actions were an ethical lapse involving 5,300 low-ranking workers
, who have since been fired.
The resulting scandal forced Chairman and CEO John Stumpf to resign on Thursday
, “effective immediately
“… “I have decided it is best for the company that I step aside,” he said in a statement
. The bank’s board said it would claw back compensation from him
valued at $41 million. Overall, when you consider that Wells Fargo is the nation’s second-largest bank, the financial punishment
it paid out is basically what amounts to chump change.
Wells Fargo disclosed on Friday that new account openings had taken a nose-dive since the scandal over illegal activity at the bank erupted: Bank executives said customers opened 25 percent fewer checking accounts and applied for 20 percent fewer credit cards in September compared with a year ago.
Wells Fargo executives acknowledged that customers may have shunned the bank as the extent of the problems came to light. Timothy J. Sloan, who was named the chief executive on Wednesday, said on the company’s third-quarter earnings call that he understood the gravity of the situation.
A New Jersey law firm that helped Wells Fargo Bank N.A. foreclose on thousands of homeowners has sued the lender, saying the bank’s delayed efforts to fix its robo-signing problems led the law firm to collapse.
Lawyers for the Zucker, Goldberg & Ackerman law firm, which laid off most of its 335 workers last year, are accusing Wells Fargo of taking several years to comply with a 2010 New Jersey Supreme Court order that called for lenders to show that they were properly submitting mortgage details before foreclosing on a property.
The order, which required banks to submit their internal foreclosure policies, paralyzed foreclosures throughout the state. The average time for the foreclosure process—from filing the lawsuit to a sheriff’s sale—grew from about 200 days to about 1,000 days, according to documents filed in U.S. Bankruptcy Court in Newark.
Bad news for Wells Fargo…
Wells Fargo has lost its accreditation with the Better Business Bureau, another setback for the San Francisco company as it grapples with fallout from a sales scandal.
The Arlington, Va.-based organization stripped the accreditation following Wells’settlement last month with regulators who accused the bank of opening millions of accounts that customers may not have authorized. The government action pushed Wells Fargo below the “B” rating required for businesses to maintain accreditation.
In a statement, Wells Fargo said it will “continue to work hard to restore our customers’ trust” and is “focused on providing the best service to our customers.” The bank said its No. 1 priority is making things right with its customers and restoring public trust, pointing to steps it is taking to ensure its sales culture is “100 percent aligned with our customers’ interests.”