Summary.
In the late summer of 2016 allegations that employees of Wells Fargo’s retail banking unit had opened more than a million unauthorized accounts and sold customers thousands of unneeded products hit the national news. The scandal cost Wells Fargo dearly. On September 8 the Consumer Financial Protection Bureau (along with the Office of the Comptroller of the Currency and the City and County of Los Angeles) fined the company $185 million—and after revelations of more consumer abuses came out, Wells Fargo would later be fined an additional $1 billion and shell out $575 million to settle legal claims. By the end of September, the bank’s stock price had fallen 13%, slashing Wells Fargo’s capitalization by some $20 billion, and it continued to stagnate while the market soared. John Stumpf, who resigned as CEO that October, and Carrie Tolstedt, the head of the retail bank who’d announced her retirement that July, were forced by the board to forfeit tens of millions of dollars in pay. Four of the unit’s senior managers were terminated for cause. Wells Fargo’s reputation was left badly tarnished—a humiliation for the 160-year-old institution.