Crime

Finally, a big bank CEO is being held accountable and we owe it all to Elizabeth Warren

In a first since the financial crisis, a big bank is forcing a CEO to take some public responsibility for misconduct committed on his watch.

According to The Huffington Post, Wells Fargo CEO and chairman John Stumpf will “forfeit $41 million in unvested stock, give up his $2.8 million annual salary (for a time) and get no bonus this year.” Stumpf still has $247 million in WF stock and he gets to keep his position as CEO.

Over the last 5 years, the bank fired 5,300 “low-paid workers” in connection with the scandal, where Wells Fargo employees opened more than 1.5 million fraudulent checking accounts and applied for more than 565,000 credit cards using customer info without their knowledge. As a result, Wells Fargo is paying $185 million in penalties.

The fact that Stumpf is facing any kind of consequence at all is due to the efforts of Elizabeth Warren.

“You should resign… and you should be criminally investigated.” Warren said to Stumpf during a hearing last week.

Taking to Twitter this Wednesday, Warren said that Stumpf’s punishment was a “step in the right direction” but more needs to be done.

From HuffPo:

On Tuesday, Wells Fargo’s board also said that Carrie Tolstedt, the executive responsible for the banking unit that had been ripping off customers, was leaving effective immediately, pushing up her retirement date from the end of this year. She will also get no severance pay or bonus for this year, give up $19 million in stock and won’t receive some “retirement enhancements.”

Although Strumpf looks like he may still be sitting pretty, a press release from Wells Fargo’s lead independent board member Stephen Sanger suggested that the CEO may have a rocky road ahead, since the bank is hiring an independent law firm to “take all appropriate actions” regarding the scam.

Strumpf’s penalties mark the first time a banking figure has been held accountable since the financial crisis. JPMorgan’s Chairman and CEO Jamie Dimon came the closest when he took a pay cut from $23.1 million the year before the scandal to $11.5 million.

“Our biggest concern is that too many people are focused just on the CEO,” Dennis Kelleher, the president and CEO of the nonprofit Better Markets, told The Huffington Post.

“This was a breakdown of the entire corporate chain of command.”

 [The Huffington Post]

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