Briefing Board
But executives outside the community bank, including Chief Risk Officer Michael Loughlin, grew concerned after learning of the figure in April 2014 and summoned Tolstedt to a meeting that month. However, she had jury duty.
Los Angeles sued Wells Fargo in May 2015 for allegedly opening accounts and issuing credit cards without customers’ permission. Days later, the board’s risk committee first learned of mass firings, according to the report. In a meeting with executives including Tolstedt, the committee was told 230 employees had been fired in 2013 and 2014 after an investigation that began in Southern California. It was the first time directors had heard of any mass termination.
In reality, more than 2,500 employees had been fired those years, according to the report.
“Multiple board members have stated that they felt misled by the presentation,” the report found. “Even if the community bank genuinely believed that the actual termination figures were unnecessary or had shortcomings, the risk committee had asked for that exact information, which was readily available, and its deletion created an inaccurate picture as to the scope and extent of sales practice problems.”
It wasn’t until Wells Fargo settled with federal regulators on Sept. 8 that the board learned 5,300 people had been fired from 2011 through March of last year, according to the report.
The company’s stock dropped 13 percent the month of the settlement. The board has since cut or clawed back more than $180 million in pay to senior leaders including Tolstedt and Stumpf. It made the decision on Stumpf’s $28 million clawback on Friday.
This article was provided by Bloomberg News.