Amid mounting pressure brought about by a senate investigation on financial anomalies at Wells Fargo, John G. Stumpf gave up his post as chairman and chief operating officer of the bank, submitting his resignation to the board of directors.
With his resignation, Stumpf will not be entitled to severance benefits and stands to lose $41 million in stock grants and $2.8 million annual salaries which he gave up pending the board's investigation into the banks scandalous transactions.
Wells Fargo, has lost its most valuable bank status prestige due to unscrupulous transactions made by bank employees starting on 2013. The anomalous transactions consisted of fake accounts created by bank employees using existing customer names and real bank accounts.
Banks customers started complaining when they discovered that their accounts were tampered with and were being charged with fees in connection with the created bogus accounts. Numerous complaints from customers prompted investigations by the S.E.C. and Department of Justice.
The Department of Labor also conducted its own inquiries when it was disclosed that the employees created fake counts to meet the extremely high product sales targets set by the bank. In addition to internal investigations conducted by the bank, the House Financial Services Committee had also summoned Stumpf to appear in the public hearings.
These investigations have disclosed that the anomalous transactions may have started as early as 2009. The bank irregularities discovered have caused public outrage and turned this fiasco into a political issue.
Both Democratic and Republic parties agree on the gravity of the bank's offense and jointly denounce Wells Fargo for this transgression against their bank customers.
Meanwhile, Wells Fargo announced that Timothy J. Sloan, its president and chief operating officer, will replace John G. Stumpf.
Stumpf's resignation might have mitigated the rising antagonism against Wells Fargo, a revered banking institution that has endured for more than a hundred years. The bank can now start recovering from this regrettable misfortune and revamp its operations to regain its lost prestige.
