$3BPhoto: John Ruckman · CC BY 2.0
Mr.Scandal
Episode 05BusinessCross-Sell
Wells Fargo fake accounts, 2016. You run a giant retail bank. The board loves your sales numbers. Your branches are opening accounts faster than customers can ask for them.WealthYour money. Hit zero and you are broke.
PR ShieldWhat the public still believes. Hit zero and you are cancelled.
ItemsOne-time aces. Play one when it fits and it is gone.
Wells Fargo fake accounts: what actually happened
Scandal Run plays 10 decisions inside Wells Fargo fake accounts, 2016. Your choices are invented; the record below is not. Each line quotes the MrScandal story and names its source, in the order it happened.
Show the real record (10 moments, spoilers)
- The quota years The Los Angeles Times reported in 2013, after interviewing 35 current and former employees, that sales quotas pushed staff to open accounts customers did not need. A later board-commissioned report said community banking head Carrie Tolstedt set sales goals even she acknowledged were unreachable.
- December 2013 Then-CFO Timothy Sloan told the Los Angeles Times in December 2013, "I'm not aware of any overbearing sales culture." Wells Fargo officials said they make ethical conduct a priority and fire employees who do not serve customers properly.
- Over five years Wells Fargo said it fired approximately 5,300 employees and managers over five years. The bank's own analysis found employees opened more than two million deposit and credit card accounts that may not have been authorized, the CFPB said.
- September 8, 2016 The CFPB, the OCC and the Los Angeles city attorney announced $185 million in penalties. The CFPB's $100 million was the largest it had ever imposed. The bank agreed without admitting or denying the legal conclusions, saying it "regret[s] and take[s] responsibility for any instances where customers may have received a product that they did not request."
- September 20, 2016 John Stumpf testified for more than two hours and told senators, "The 5,300 were dishonest, and that is not part of our culture." Senator Elizabeth Warren told him: "This is gutless leadership."
- October 12, 2016 Bloomberg reported on Oct. 12, 2016, that Stumpf stepped down as chief executive and chairman, effective immediately. Tim Sloan took over as CEO.
- April 2017 A board-commissioned report by the law firm Shearman & Sterling said Stumpf ignored growing evidence of the problem. In all, Stumpf would surrender $69 million and Tolstedt $67 million. Tolstedt's lawyer said, "We strongly disagree with the report."
- February 2, 2018 On Feb. 2, 2018, the Federal Reserve said Wells Fargo would be "restricted from growing any larger than its total asset size as of the end of 2017." The Fed also required four of the 16 board members to be replaced by year-end. The cap lasted seven years.
- January 2020 CNN reported that a month before the bank's 2020 settlement, Stumpf agreed to a lifetime banking ban and a $17.5 million fine.
- February 21, 2020 The Justice Department and the SEC resolved the case for $3 billion. The bank admitted it falsified bank records and that community bank managers knew of the gaming practices as early as 2002. CEO Charlie Scharf called the conduct "reprehensible."