“You should resign… and you should be criminally investigated.”
That’s what Senator Elizabeth Warren said to Wells Fargo CEO John Stumpf during a hearing this Tuesday. Wells Fargo is paying $185 million in penalties for stealing customer info and creating millions of bogus accounts to increase “cross-selling,” which is the practice of building the number of accounts each customer holds.
The bank says it fired some 5,300 employees who were involved.
Warren started out by citing Wells Fargo’s Vision and Values Statement, an the advertisement that says, “If you want to find out how strong a company’s ethics are, don’t listen to what its people say, watch what they do.”
“So, let’s do that,” Warren said, accusing Stumpf of failing to take responsibility for the bank’s actions. “It’s gutless leadership,” Warren remarked.
Addressing the practice of cross-selling, Warren asserted that it was “one of the main reasons that Wells has become the most valuable bank in the world.
“Cross-selling is all about pumping up Wells’ stock price, isn’t it?” Warren asked.
“No,” Strumpf answered. “Cross-selling is shorthand for deepening relationships…”
Warren interrupted him and showed 12 transcripts of Wells Fargo earnings calls from 2012 to 2014 — all of which Strumpf participated in.
“…the three full years in which we know this scam was going on,” Warren said.
“In all 12 of these calls, you personally cited Wells Fargo’s success at cross-selling retail accounts as one of the main reasons to buy more stock in the company,” Warren told him.
When Warren’s allotted time was over, she closed with these words:
Here’s what really gets me about this, Mr. Stumpf. If one of your tellers took a handful of $20 bills out of the crash drawer, they’d probably be looking at criminal charges for theft. They could end up in prison.
But you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket.
And when it all blew up, you kept your job, you kept your multi-multimillion-dollar bonuses, and you went on television to blame thousands of $12-an-hour employees who were just trying to meet cross-sell quotas that made you rich.
This is about accountability. 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. This just isn’t right.
Watch the video below:
— CSPAN (@cspan) September 20, 2016