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.