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San Francisco, we have a problem

Richard M. Steinberg | October 12, 2016

Years ago we heard the dreaded words from space, “Houston, we have a problem.” Well, now it appears Wells Fargo CEO John Stumpf did not hear similar words directed to the bank’s San Francisco headquarters. He should have.

Already reams have been written and the airwaves filled with reports of how employees created “sham” accounts that customers neither asked for nor knew about. The bank paid $185 million in a civil settlement, Stumpf has been grilled in Congressional hearings, 5,300 lower-level employees were fired, and the bank’s reputation has taken a hit. Accusations abound of a failed corporate culture, widespread mismanagement, and the board of directors not doing its job. There have been calls for Stumpf to step down, adding new directors to the board, executive pay clawbacks, and breaking up the bank. Employee class-action lawsuits have been filed, one of which is demanding $2.6 billion for demoting or ousting employees who failed to meet “unrealistic quotas.”

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