Fallout from the Wells Fargo sham account fraud continues. The scandal, which broke last fall, recently cost four senior bank executives their jobs. Handed pink slips were one of Wells Fargo’s chief risk officers, two regional presidents and the bank’s head of community strategy.
For their parts in the scandal, the executives will lose their 2016 bonuses as well as stock and stock options they were awarded because of falsely inflated sales numbers.
The scandal—in which a misguided incentive program prompted employees to create some two million accounts without customers’ knowledge or permission—has cost 5,300 employees their jobs, including long-time CEO John Stumpf.
An internal Wells Fargo investigation will conclude this spring.
However, federal officials and bank regulators from several states continue to sift through the ashes in search of potential criminal and employment law violations.
In particular, the U.S. Department of Labor has promised to examine those 5,300to determine if some fired employees were in fact whistleblowers who were sacked for speaking up about illegal practices.
Wells Fargo has denied any of the firings were retaliatory and points to its efforts to clean house to prevent similar problems from arising in the future. The bank claims it has eliminated the aggressive sales goals that allegedly drove employees to falsify accounts.
Wells Fargo executives may well be chastened by the public and regulatory backlash. Several states have stopped doing business with the bank. New account sign-ups are lagging well behind even the modest sales goals the bank set this year.
How to move on from a fiasco like the one that plagues Wells Fargo? What’s done is done. Wells Fargo will have to take its lumps. A good start would be anchange initiative. Regulators will be more lenient with an organization that, moving forward, shows it will treat its employees and customers with respect.