NEW YORK (Diya TV) — The current scandal engulfing banking house Wells Fargo led to the exit of its chief executive Wednesday, John G. Stumpf announced his departure, effective immediately.
The move is a stunning fall for a finance executive who survived the 2008 crisis relatively unscathed only to be undone by a product sales scandal that pervaded its community banking division and has percolated under the surface for years.
Wells Fargo has been under siege from irate customers, regulators, lawmakers and former employees since last month, when it disclosed that it would pay $185 million in fines and penalties over the unauthorized creation of as many as two million bank and credit card accounts over a period of at least five years by branch employees who were said to be under intense pressure to hit ambitious product sales goals.
The sales practices could reach back even farther — former Wells Fargo employees claim they raised concerns of the issue more than a decade ago, according to a report from the New York Times.
Stupmf, who has twice been summoned in front of Congress to testify on the matter, faced screaming voices from the public calling for his immediate resignation. However, the actual timing of his exit will likely catch the bank’s board off guard. The board received a letter from Mr. Stumpf early on Wednesday indicating that he intended to retire, according to a person briefed on the matter.
The same person said the board was still in the early stages of conducting its investigation into the fake accounts and Mr. Stumpf’s handling of the scandal. The board had made no efforts to force Stumpf out, and was not scheduled to meet when his letter was tendered. In fact, the board was expecting that Mr. Stumpf would address analysts and investors — as he has always done — when the bank reports its third-quarter results on Friday.
Wells Fargo said Mr. Stumpf would be replaced by Timothy J. Sloan, its president and chief operating officer. Just two days earlier, the San Francisco bank shuffled its top management to give more responsibility to Mr. Sloan.
“I am grateful for the opportunity to have led Wells Fargo,” Mr. Stumpf said in a written statement. “While I have been deeply committed and focused on managing the company through this period, I have decided it is best for the company that I step aside.”
