Sen. Elizabeth Warren told the CEO of Wells Fargo Tuesday that he should resign for his role in the bank’s fake accounts scandal and that federal prosecutors should investigate him for fraud, in the toughest line of questioning during a hostile hearing.
“You should resign,” the liberal Massachusetts senator said to John Stumpf as he appeared before the Senate Banking Committee. “You should give back the money that you took while this scam was going on, and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.”
Producing transcripts of past Wells Fargo earnings calls, Warren cited 12 instances in which Stumpf mentioned the bank’s success in getting customers to sign up for multiple accounts as a reason to invest. The bank has already paid regulators more than $180 million for creating accounts for customers without their knowledge or consent, often faking PINs or email addresses.
During the time that that the fake accounts were being opened, Stumpf’s personal stake in the company increased by more than $200 million, Warren said.
She said it was “gutless leadership” for him not to pay the money back and to blame low-level employees for the widespread practice of opening illicit accounts.
“You kept your job, you kept your multimillion bonuses, and you went on television to blame thousands of $12-an-hour employees” for the failure, she said.
Sen. Jeff Merkley, D-Ore., also called for the SEC to investigate Wells Fargo for misrepresenting its business to investors.
During the testimoney, Stumpf said that there was no orchestrated effort by the bank to push employees to open fake accounts. He also said that opening accounts that customers didn’t want was bad for the company.
Whether his compensation should be clawed back would be left up to the company’s board of directors, he said.
