After Public Outcry Over $125 Million Tolstedt Bonus, Wells Fargo Will End Sales Goals For Retail Bankers

Tyler Durden's picture

As a result of the righteous outrage following news that Wells Fargo rewarded Carrie Tolstedt, the head of the group that was recently exposed as creating some 2 million fake credit card and bank accounts so it could churn late fees, and was in charge of what the bank's employees called "sandbagging", was leaving the bank with a $125 million package, this morning a panicked Wells Fargo, Warren Buffett's favorite bank and the largest U.S. bank by market capitalization, said that it would eliminate all product sales goals in retail banking, starting next year.

Wells Fargo said it had fired 5,300 employees involved in the sales practices described by the settlement; what Wells did not say is provide any explanation over the hushed departure of Tolstdet and her $125 million golden parachute.

The move comes days after the Consumer Financial Protection Bureau (CFPB) and two other regulators fined the bank $185 million over abusive sales practices. As Reuters reminds us, the bank paid another $5 million to customers for creating more than two million fake accounts for products like credit and debit cards to meet aggressive sales targets.

In an amusing statement, Chief Executive John Stumpf said that "customers should know that Wells Fargo retail bankers are always focused on their best interests." Well, except when the bank is caught not only engaging in massive fraud against its customers, but also rewarding the person directly responsible for it with a $125 million pay day.

On Monday, five lawmakers wrote a letter to U.S. Senate Banking Committee Chairman Richard Shelby calling for an investigation.

That may not be the end of it. As the FT reported overnight, the country's biggest mortgage lender was also facing calls to claw back bonuses paid to senior executives, including the outgoing head of its community banking division, as the fallout over its sham account scandal intensifies. Two top institutional shareholders in the world’s most valuable bank by market capitalisation have demanded answers over payments to Carrie Tolstedt, who headed the division where the episode took place.

One large investor told the Financial Times that Wells should reclaim bonuses from the Wells executive, who has received at least $45m in total pay since 2011.

“There’s no point having a clawback if it doesn’t claw in circumstances like this,” the shareholder said. “What has happened at Wells is an affront to the integrity of the institution.”

Another investor said: “If this person presided over this, why no accountability? We have share-based pay so that it can be clawed back when people have been earning bonuses under false pretences, and if fraudulently opening client accounts isn’t false pretences, then I don’t know what is.”

Cited by the FT, Bernie Sanders, the US senator who ran unsuccessfully for president this year, also weighed in, calling the pay for Ms Tolstedt a “disgrace”.

Moody’s on Monday described the regulators’ disclosures as “highly disturbing” in what has been an "embarrassing episode" . The rating agency said the developments were a “credit negative” for the bank.

We expect that after some congressional hearings and several carefully phrased press releases, some or all of Toldstedt bonus will be clawed back, at which point CEO Stumpf will once again repeat that customers should know that Wells Fargo retail bankers are always focused on their best interests." Sadly, just like in the case of Goldman and every other bank, customers are merely the muppets to be abused and since nobody ever goes to prison, the abuse is certain to continue indefinitely until something finally changes.

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rct786's picture

Going to close out my WF accounts today.  Fuck em

Muddy1's picture

Make it crystal clear why you are closing the accounts out.

VinceFostersGhost's picture

 

 

I'm opening a checking account with the Clinton Foundation today.

BennyBoy's picture

 

No more sales goals.

Now rebranded "Sales Metrics"

Problem solved. Right Warren?

 

NoDebt's picture

"it would eliminate all product sales goals in retail banking, starting next year"

Yeah, like the Clinton Foundation will stop taking foreign donations "next year".  Unless, of course, Wall St. shill, Hillary gets in.  Then they're "reevaluate that decision".

CheapBastard's picture

... and still not one fraudster went to jail.

Even in China they'd lock you up for life [or execute you] for this kind of massive blatant fraud.

While Lowrenta is busy chasing climate change deniers. I hope Trump fires her incompetent booty on Day 1, along with Comey and the head of the VA and numerous other incompetent or corrupt people.

ghostofelvis's picture

I used to work in retail banking and this was common across the board.  Personal bankers and tellers are pressured to meet sales goals and get paid for every opened account.  They have access to all your personal information and can set up accounts in your name with a different mailing address so you never know about it.  

Arnold's picture

Ya Know....

I might give Disgrace a thought for $125 million.

Not much of a step beyond Deplorable.

HopefulCynical's picture

Bankster heads on pikes. As LoP says, roll the fucking guillotines or nothing changes.

Muddy1's picture

EXACTLY, and how many other banks are doing what WtF did?

Tellers are also pressured to complete a quota of SAR's to prevent, don't you know, criminal activity such as money laundering!!!!

By law everyone is entitled to a free credit report.  I urge every ZH'er to get their report and make certain phony accounts haven't been ste up using their personal data.

Go long on LIFELOCK!!!!!!!!!!!!!!!!!!!!!

BabaLooey's picture

Write yourself a check for $100,000,000.00

Make it out the the "Fort Marcy Park Fact Finders Club"

In the Note section, write "Payoffs - Editing Department: CBS"

Ramesees's picture

Anyone know what were the monetary losses (if any) for the victims of the fraudulent accounts?  I don't mean people that were upsold into opening more accounts than they needed, people who actually had fraudulent accounts opened in their name?  

chunga's picture

This deal here flew right past banana republic into a stratosphere of fraud never before known to humanity. A national bank creating millions of fraudulent, criminal accounts. Where is the outrage out of these congress fucks? WF needs to be burned down to the ground.

 

Just imagine what happens to a regular person that writes 200 bad checks nevermind 2 fucking million.

Bay of Pigs's picture

It's pathetic and sickening.

Land of the Free? Laughable....

chunga's picture

To me this isn't like some ordinary cycle where the pendulum is eventually gonna swing back. We are in uncharted waters with the US gov a nuclear powered police state, a giant black hole of raw corruption and fraud that sucks everything up in it's path. IMHO we are right on the edge of a totaltarian regime with the media being just a form of crowd control. Stories like this one illustrate how absurd the narrative is.

 

When black hole popped in my head it made me think of this old article by Orlov my favorite contemporay author. He really has a way with words.

The Care and Feeding of a Financial Black Hole

http://cluborlov.blogspot.com/2015/06/the-care-and-feeding-of-financial-...

HopefulCynical's picture

Remember when BankAmericard became Visa? Same sort of name change here.

[Announcer voice-over] "The United States is now - BanksterLand."

Uncertain T's picture

Each of them should be charged with a million seperate counts of identity theft.  This is disgusting.

Ramesees's picture

Are there any victims that actually lost money though?  Genuinely curious.  There do not seem to be any though, which is why the fine was so light relative to the magnitude of the fraud.  

chunga's picture

Part of the settlement was they had to make restitution so I assume there are some. Also part of the settlement was they admitted to no wrongdoing. I hope every one of them sues.

FireBrander's picture

Why do you have an account there in the first place?

WF and BAC are two of the worst banks...both should have closed in 2009...and you give them your business?

Muddy1's picture

There is a reason they are called BANKSTERS.

It would be VERY easy to calculate how many phony accounts each of the 5,300 employees set up.  Then charge each employee with that many counts of identity theft, and conspiracy to commit the crime.  Their supervisors could be charged the same way for the total number of identity thefts each of their employee committed.  And this cunt who thinks she earned a $125 million bonus should be charged for every one of the identity thefts.

From what I understand she retired when she knew she was caught in order to make sure she got this bonus.

What did Obama say several years ago about the excess bonuses being paid to banking executives? 

DetectiveStern's picture

I feel for the guys who carried this out at the bottom. If the culture is anything like the retail bank I worked at then you'll be paid near minimum wage, be told to do things you dont understand (imagine your boss saying process these transactions you dont know what the purpose is or where the money is coming and going from) etc and the only way to get away from it is to quit and go do some other shit job or do it and hope for a promotion.

They use compartmentalisation so most doing it probably had no idea the full extent.

ghostofelvis's picture

Bingo!  I didn't make it in retail banking.  I asked too many questions and couldn't drink the kool-aid. 

G-Rat's picture

You hit the target at compartmentalization. I have worked a level or two "up" from retail and all information where I work is "need to know" and compartmentalized.

Part of the problem is who is hired. Part of the problem is not that people Just "follow orders" but 90% of the people hired at retail and lower levels don't have the logic and crticial thinking skills to think through management BS. These results are not surprising give that most of the retail workers are derived from lower socio-economic backgrounds, receive minimum wage pay, and are under extreme pressure to cross-sell and the results are not surprising.

DetectiveStern's picture

The decline of manufacturing means those who'd have gone to work on production lines now do low level white collar work.

In the city i live in 30% of work is at banks. Take away government work, bars, shops and trades and there isn't much left for people to do.

CheapBastard's picture

You got that right! It's similar to Mozillo creating millions of NINJA loans knowing very well they can't afford them and the vast majority will go under. he did not spend one minute in jail...never was even indicted.

There really has never been a better time then now to be in the financial industry, for sure.

DavidC's picture

I'm getting angry today.

FUCK HER! Take back the bonus for the criminality she facilitated!

DavidC

Ascew's picture

why is she not being prosecuted?

 

VinceFostersGhost's picture

 

 

why is she not being prosecuted?

 

Diplomatic immunity?

101 years and counting's picture

how can she be prosecuted for taking orders from the great warren buffet? she is in the immunity camp because she blows that old wind bag.

Muddy1's picture

From November 2010

http://www.reuters.com/article/us-obama-buffet-idUSTRE6AG4MU20101117

 

Furthermore she gave to the Clinton Foundation and plays golf with Loretta Lynch's husband.

KickIce's picture

Prosecution is for the homeless person trying to steal a can of food.

yellowsub's picture

This is America, we don't prosecute these crimes.

Pay the fines to commit crimes the next day...

 

Captain Chlamydia's picture

We ripped off some folks and rewarded the master thief with $125 million..... That’s the way the cookie crumbles!

Ex-Oligarch's picture

So, the bold defenders of integrity at CFPB extracted $185M.
And afterwards Wells was still feeling so flush it tossed $125M at the lead perp.
Just how much money did they steal through this scheme?

The hardbitten negotiators and dedicated public servants over at CFPB should issue an apology.  Or do something useful like jump off a cliff.

overmedicatedundersexed's picture

the little workers got shit canned..she gets the golden parachute...corzine approved

SharkBit's picture

Damn people.  Here is a clue.  When you do not support the behaviour of the elite network just stop consuming their products.

overmedicatedundersexed's picture

thought long ago the dirty grease haired hippy females and males would distain consumerism..how wrong I was..they now are pushing the moar moar..lifestyle NWO has won many of them.

The Gun Is Good's picture

Excerpt from "The Ascent of Stan" by Ben Folds:

"

The ascent of Stan
Textbook hippie man
Textbook hippie man
Get rest while you can

Stan: Once you wanted revolution
Stan: Now you're the institution
Stan: How's it feel to be the man?
It's no fun to be the man

And now, watch it all go down

"

DavidC's picture

I do. I don't own any crApple, I won't use Google Chrome, I've got a minimal F***book account, I don't use Twatter, etc etc.

My language is sinking today, but FUCK THEM.

DavidC

SomethingSomethingDarkSide's picture

"embarrassing episode"

 

How about a mother fucking travesty had a baby with a fiduciary abomination

VinceFostersGhost's picture

 

 

But we don't think she "intended" too.

SomethingSomethingDarkSide's picture

Sorry, your Honor, I was careless when dropping that baby on the cement!  It wouldn't have gone this way had there not been so much pressure!

Mat Cauthon's picture

An obscure nerdy blonde lady commits fraud... HANG HER! - Congress

Now, if it were Jamie Dimon and Lloyd Blankfein...