Wells Fargo starts own probe as House hearing looms
Wells Fargo & Co. said on Tuesday that its independent directors will conduct an investigation into the firm's retail banking sales practices.
The United States' third-largest bank by assets agreed to pay $190 million earlier this month to settle regulatory charges that some of its employees opened as many as 2 million accounts without customers' knowledge in order to meet sales targets.
Wells Fargo Chief Executive Officer John Stumpf will forfeit equity awards valued at about $41 million and will not receive a salary during the investigation, a statement from the company said.
Stumpf has recused himself from the investigation, the bank said.
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The statement also says Carrie Tolstedt, the company's former head of community banking, has left Wells Fargo. She will receive no severance and has forfeited unvested stock awards valued at approximately $19 million.
Neither she nor Stumpf will receive a bonus for this year.
"We are deeply concerned by these matters, and we are committed to ensuring that all aspects of the company's business are conducted with integrity, transparency, and oversight," said lead independent director Steve Sanger, former CEO of General Mills. "We will conduct this investigation with the diligence it deserves and will follow the facts wherever they lead."
Sanger and Stumpf served together on the board of Target Corp. for about three years until 2013. Stumpf is a Minnesota native and spent much of his career in Minneapolis with Norwest Corp., which acquired and took the name of Wells Fargo in 1998.
Members of the U.S. Senate Banking Committee from both sides of the aisle grilled Stumpf about the accounts last week, with some calling on him to resign and forfeit his earnings and hold other senior executives accountable.
The San Francisco-based bank has said it has retail banking on Jan. 1, 2017.
Wells Fargo has hired law firm Shearman & Sterling LLP to assist in the investigation.
The company's announcement comes two days before Stumpf is scheduled to testify before the U.S. House Financial Services committee.