September 1 (Reuters) - Wells Fargo & Co on Thursday raised the estimate of accounts opened without customers’ knowledge by 1.4 million, bringing the total to about 3.5 million.
The scandal over phony accounts came to light last September after the company announced a $185 million settlement with regulators to atone for the sales abuses.
The third-largest U.S. bank by assets has since encountered numerous government probes and lawsuits.
In response, Wells Fargo has fired senior managers, changed pay incentives for branch staff, separated the role of chairman and CEO and faced a difficult shareholder vote at its annual meeting. tmsnrt.rs/2tNpLd1
John Stumpf, the company’s CEO when the scandal broke, also announced his retirement in October, following weeks of intense public pressure. He was succeeded by Tim Sloan.
The bank still faces probes from federal, state and local government agencies, including the U.S. Department of Justice, as well as a number of private lawsuits, according to regulatory filings.
Here are the important events that took place since news of the sales scandal emerged:
Sept. 8, reut.rs/2teQNX7 Agrees to pay $185 million in fines and $5 million in penalties to
2016 customers, as part of settlement with Los Angeles officials who
accused the bank of pushing customers into multiple, fee-generating
accounts that they never requested.
Mid Sept, reut.rs/2teLqqT Bank's independent directors launch investigation into sales
2016 practices; engage law firm Shearman & Sterling LLP.
Sept. 19, reut.rs/2tLsbsv CEO John Stumpf appears before the Senate Banking Committee, comes
2016 under fire for his oversight. Says customers who had bogus accounts
opened in their names will be compensated for damage to credit rating.
Democratic Senators Jeff Merkley and Elizabeth Warren ask him to
resign. Warren says Stumpf should return his salary and be criminally
Sept. 27, reut.rs/2thWBPP Carrie Tolstedt, head of the retail division at the center of the
2016 sales scandal, leaves ahead of her scheduled retirement on Dec. 31; to
get no severance or equity awards.
Stumpf to forgo equity awards worth $41 million and salary.
Sept. 27, reut.rs/2teJGho Bank eliminates product sales goals in retail division.
Oct. 10, reut.rs/2teLF5h Forms new payments, virtual solutions and innovation business group.
Appoints new members to its operating committee, and leaders for
consumer lending and wholesale banking.
Oct. 12, reut.rs/2teVFLZ Stumpf retires as CEO and chairman. Tim Sloan appointed CEO.
2016 Names Steve Sanger independent chairman and Betsy
Duke independent vice chair.
Oct 14, reut.rs/2teUbBk Reports 3.7 percent drop in Q3 profit as it sets aside funds for
2016 potential legal costs.
Nov. 29, Amends by-laws to ensure board chairman and any vice chairman be
2016 independent directors.
Jan. 10, reut.rs/2teLIOF Introduces new incentive compensation plan for team
2017 members in retail branches and call centres.
Jan 13, reut.rs/2teWi8g Q4 profit falls 6.4 percent; says still analyzing whether additional
2017 unauthorized accounts were opened in 2009 and 2010.
Feb 20, reut.rs/2tillqY Board elects two new independent directors, Karen Peetz and Ron
Feb 21, reut.rs/2teNOOn Terminates employment of four current and former managers in Community
2017 Bank division due to the sales practices. Says none will receive a
2016 bonus and each will forfeit all outstanding equity awards and
March 1, reut.rs/2teBcai Says no 2016 cash bonuses for eight senior executives, including CEO
2017 Sloan and CFO John Shrewsberry; reduces three-year equity awards made
in 2014 by up to 50 pct for the executives.
April 13, reut.rs/2teTTKR; Posts nearly flat Q1 profit. Berkshire Hathaway says to sell 9 million
2017 reut.rs/2tM1owd shares and withdraw its application for permission to boost its
ownership stake above 10 percent.
April 25, reut.rs/2tN2c42 Shareholders rebuke the bank at the annual meeting; offer scant
2017 support for a dozen directors, including chairman
May 6, 2017 reut.rs/2tMaXv9 "At Wells Fargo, there were three significant mistakes, but one dwarfs
all of the others ... You have to be careful what you incentivize.
There was an incentive system built around cross-selling ... That was
incentivizing the wrong kind of behavior,” Warren Buffett at
Berkshire’s 52nd annual meeting”The main problem was they didn’t act
when they learned about it.”
May 11, reut.rs/2tMGH3e Doubles cost-cutting target at investor day
June 13, reut.rs/2tMk278 Branch employees paid for the first time in May using new goals that
2017 focus on customer service, says branch banking chief Mary Mack at an
June 28, reut.rs/2tQ4wWk Receives no objection to its 2017 capital plan from the U.S. Federal
July 13, reut.rs/2tNjM8b The Federal Reserve is prepared to act against the directors of Wells
2017 Fargo if an investigation deems it appropriate, Chair Janet Yellen
said while testifying before the Senate Banking Committee
July 14, reut.rs/2eplPGJ Q2 revenue misses estimates; bank indicates costs may remain elevated
2017 in the near term
August 31, reut.rs/2ep9aUj Says 1.4 million additional accounts were potentially opened without
2017 permission, bringing the total estimate to 3.5 million accounts opened
Source: Company filings, company presentations, Reuters
Reporting By Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila