U.S. lawmakers ask Wells about taking
back bonuses linked to scam case
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[September 16, 2016]
WASHINGTON (Reuters) - Five
Democratic U.S. Senators have asked Wells Fargo if it plans to take back
bonuses and other compensation to executives linked to the 2 million
phony bank accounts that employees created to meet sales quotas.
The Consumer Financial Protection Bureau and other regulators announced
last week that they had reached a $185 million settlement with the bank
over the scam.
"...We write to ask whether the Board of Directors will invoke Wells
Fargo's clawback authority to recover any of the compensation the
company has provided to its senior executives, including Carrie
Tolstedt, the former senior executive vice president of community
banking," they wrote in a letter dated Thursday and released on Friday.
The five - Massachusetts' Elizabeth Warren, Ohio's Sherrod Brown, Rhode
Island's Jack Reed, New Jersey's Robert Menendez, and Oregon's Jeff
Merkley - said Wells Fargo has cause to claw back money under a policy
it instituted after the 2007-09 financial crisis.
"These clawback provisions are designed to prevent exactly what happened
with Ms. Toldstedt: Shareholders and consumers bearing the burden of
bank misconduct while senior executives walk away with
multimillion-dollar awards based on what the company later finds out are
fraudulent practices," they wrote.
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A Wells Fargo branch is seen in the Chicago suburb of Evanston,
Illinois, U.S. on February 10, 2015. REUTERS/Jim Young/File Photo
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Toldstedt led the bank division running the incentive program that
pushed the employees to create fake accounts under real customers'
names, often hurting those customers' credit scores, and received
more than $20 million in annual bonuses between 2010 and 2015, they
wrote.
Wells CEO John Stumpf will testify on Tuesday before the Banking
Committee, where Brown is the most senior Democrat.
(Reporting by Lisa Lambert; Editing by Cynthia Osterman)
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