Wells Fargo may take more disciplinary action over sales abuses
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The sign outside the Wells Fargo & Co. bank in downtown Denver April 13, 2016. REUTERS/Rick Wilking
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By Dan Freed
(Reuters) - Wells Fargo & Co may take additional disciplinary action over sales abuses that led to $185 million in penalties and the firing of 5,300 employees, Chief Financial Officer John Shrewsberry said at an industry conference on Tuesday.
He said the bank will "take a big wide fresh look at who knew what and when and what else might have been done."
Shrewsberry said the review would impact people "at all levels of the organization."
Last week, Wells Fargo paid $185 million in fines and $5 million to customers after reaching a settlement with three regulators over sales abuses as employees opened sham credit card, debit card and other accounts to meet aggressive sales targets. The phantom accounts resulted in some customers being hit with fees for insufficient funds.
The incident has also brought attention to the compensation of Carrie Tolstedt, who stepped down as head of the bank's Community Banking unit in July. According to the bank's 2015 proxy, Tolstedt received more than $9 million in cash and stock in 2015, and she has more than 2.5 million in Wells Fargo shares which would be worth about $120 million at Tuesday's prices.
Wells Fargo announced Tuesday it would eliminate product sales goals for retail bankers, one of several recent measures it has taken to try and get in front of a gathering public storm over the sales scandal.
In a interview with CNBC Tuesday, U.S. Treasury Secretary Jack Lew said the enforcement action highlighted "bad behavior" by Wells Fargo, adding "how that flows through in terms of next consequences is going to depend on the facts of the case."
A Wells Fargo spokeswoman declined to comment on Lew's remarks. A Wells Fargo spokeswoman said Tolstedt was not fired, but "made a decision to retire at the end of this year." Tolstedt could not be reached.
The issue has also attracted the attention of U.S. Democratic presidential nominee Hilary Clinton, and at least seven U.S. Senators have signed letters calling for an investigation.
Shrewsberry said 10 percent of the 5,300 employees who were fired were managers, including store managers. He said roughly two thirds of the employees disciplined were in the Southwestern U.S., and they were largely "people trying to meet minimum goals to hang onto their job."
Shrewsberry said the bank increased staffing to prepare for the fallout over the regulatory settlement, but has so far seen "very very low volumes of customer reaction."
(Additional reporting by Jonathan Stempel)
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