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Wells Fargo CEO Resigns, Elizabeth Warren Calls For Investigation

Elizabeth Warren announcement day 2020 (photo via Elizabeth Warren). Wells Fargo Bank (photo via Mike Mozart)
Elizabeth Warren announcement day 2020 (photo via Elizabeth Warren). Wells Fargo Bank (photo via Mike Mozart)

“About damn time. Tim Sloan should have been fired a long time ago.”

Wells Fargo CEO Tim Sloan abruptly resigned last Thursday. The former CEO’s three-year tenure was marred by scandals involving corruption, fraud, and customer deception. Most notably, Sloan was a higher-up during the fake account scandal of 2016, in which the company guided employees to open fraudulent accounts in their customer’s names and charged them unnecessary fees.

Senator Elizabeth Warren tweeted in response to the news, “About damn time. Tim Sloan should have been fired a long time ago. He enabled Wells Fargo’s massive fake accounts scam, got rich off it, & then helped cover it up. Now—let’s make sure all the people hurt by Wells Fargo’s scams get the relief they’re owed.”

In a subsequent tweet, Warren wrote, “By the way, getting fired shouldn’t be the end of the story for Tim Sloan. He shouldn’t get a golden parachute. He should be investigated by the SEC and the DOJ for his role in all the Wells Fargo scams. And if he’s guilty of any crimes, he should be put in jail like anyone else.”

Warren has been intensely critical of Sloan for years, telling the former CEO in a 2017 hearing that he should be fired for either incompetence or complicity after the fake account scandal. The 2020 presidential hopeful said Sloan should be investigated by the SEC and DOJ and go to jail if found guilty of crimes. Sloan received a 35 percent raise the year after Wells Fargo paid out $185 million in fines for opening fraudulent accounts in their client’s names. His retirement package includes stock grants and $24 million dollars.

“Recent reports provide more evidence that Wells Fargo is fundamentally broken, with a record of misconduct that has lasted for years,” senators Warren and Brown wrote. “There is no evidence whatsoever that Mr. Sloan will fix these problems.”

According to chairwoman Betsy Duke, the board is going to “try to recruit an executive from outside, someone without the baggage of being a Wells Fargo veteran.” The coming CEO will be subject to intense scrutiny by prominent Democrats like Sen. Warren and Sen. Sherrod Brown, who have urged the Federal Reserve to prevent Wells Fargo from growing until Sloan leaves. In 2018, federal regulations were placed on the bank to keep it from expanding, and the lawmakers seek to maintain their restrictions on the company.

Senator Warren has alluded to her “Ending Too Big To Jail” initiative after Sloan’s resignation, which would involve creating a permanent investigative unit for financial crimes, requiring big bank executive certifications, and other measures to enforce punitive measures on executives deemed responsible for financial crimes.

Others, such as CNBC’s Mad Money host Jim Cramer, feel Sloan’s reputation has been unfairly tarnished by being a high-ranking official at the bank during former CEO John Stumpf’s leadership. Cramer said Sloan was “guilty until proven guilty” by politically motivated lawmakers, and that it’s possible he had no knowledge of the bank’s fake account scandal.

“I’m not saying we should feel bad for the guy … He’ll be fine. But I will say that Sloan was asked to clean up the Augean Stables and from what I can tell he’s done a good job at that Herculean task, without derailing the earnings,” Cramer said.

Democratic lawmakers have not only grilled Sloan on consumer fraud, but also on Wells Fargo’s relationship to private prisons, the fossil fuel industry, and the NRA. Public activism, such as the American Federation of Teachers decision to cut all financial ties with the bank over its relationship with the NRA, and shareholder pressure to divest from fossil fuel pipelines, have fortified Sloan’s bad reputation. On March 12, Alexandria Ocasio-Cortez questioned Sloan on being “involved with the caging of children,” regarding its financing of private prisons, the former CEO responded, “We will exit that relationship [with the private prison industry],” illustrating the power activists and lawmakers have developed over the disgraced institution.

But the final nail in the coffin of Sloan’s three decades at Wells Fargo was most likely a recent New York Times expose that interviewed 17 employees at the bank, who described a culture of “heavy pressure to squeeze extra money out of customers.” With the public increasingly unforgiving of corporate misbehavior, it appears Wells Fargo will have to reinvent its internal culture to liberate itself from regulations, fines, and rigorous government oversight.

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Peter Castagno

Peter Castagno is a freelance writer with a Master’s degree in International Conflict Resolution. He has traveled throughout the Middle East and Latin America to gain firsthand insight in some of the world’s most troubled areas, and he plans on publishing his first book in 2019.

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