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Wells Fargo CEO retires amid cross-selling scandal

Joe Mont | October 13, 2016

Amid a growing chorus of hectoring critics, Wells Fargo Chairman and CEO John Stumpf has called it quits.

In an announcement on Thursday, the company confirmed that Stumpf—amid revelations that at least 2.5 million unauthorized accounts and credit cards were opened for unsuspecting customers—retired from the company and its board of directors, effective immediately. The financial terms of Stumpf’s retirement package were not immediately known.

Tim Sloan, the company’s president and chief operating officer, will succeed him as CEO; Stephen Sanger, lead director, will serve as the board’s non-executive chairman with independent director Elizabeth Duke as vice chair.  Sloan also was elected to the Board.

“John Stumpf has dedicated his professional life to banking, successfully leading Wells Fargo through the financial crisis and the largest merger in banking history, and helping to create one of the strongest and most well-known financial services companies in the world,”” Sanger said in a statement. “However, he believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the Company forward. The Board of Directors has great confidence in Tim Sloan. He is a proven leader who knows Wells Fargo’s operations deeply, holds the respect of its stakeholders, and is ready to lead the Company into the future.”

 Stumpf, a 34-year veteran of the company, joined Wells Fargo in 1982 as part of the former Norwest Bank, becoming Wells Fargo’s CEO in June 2007 and its chairman in January 2010.

Stumpf’s sudden retirement is too little, too late as far as Sen. Elizabeth Warren (D-Mass.) is concerned.

“Wells Fargo was caught in a massive, years-long scam that cheated thousands of customers while senior bank executives made millions of dollars,” Warren said in a statement. “As I said at [a Senate Banking Committee hearing] last month, Mr. Stumpf should resign, return every nickel he made while this scam was going on, and face an investigation by the Justice Department and Securities and Exchange Commision. So far, he's one for three.”

“If Mr. Stumpf is leaving with all of his ill-gotten millions, that's still not real accountability,” Warren added. “A bank teller would face criminal charges and a prison sentence for stealing a handful of 20s from the cash drawer. A bank CEO should not be able to oversee a massive fraud and simply walk away to enjoy his millions in retirement.”