July 13 (Reuters) - The scandal surrounding Wells Fargo & Co's opening of up to 2.1 million accounts in customers' names without their permission came to the fore in September. On Sept. 8, the company announced a $185 million settlement with regulators to atone for the sales abuses. The third-largest U.S. bank by assets has since encountered numerous government probes and lawsuits. In response, Wells Fargo has fired senior managers, changed pay incentives for branch staff, separated the role of chairman and CEO and faced a difficult shareholder vote at its annual meeting. http://tmsnrt.rs/2tNpLd1 John Stumpf, the company's CEO when the scandal broke, also announced his retirement in October, following weeks of intense public pressure. He was succeeded by Tim Sloan. The bank still faces probes from federal, state and local government agencies, including the U.S. Department of Justice, as well as a number of private lawsuits, according to regulatory filings. Here are the important events that took place since news of the sales scandal emerged:
DATE USN NEWS Sept. 8, http://reut.rs/2teQNX7 Agrees to pay $185 million in fines and $5
million in penalties to
2016 customers, as part of settlement with Los Angeles
officials who accused the bank of pushing customers into multiple, fee-generating accounts that they never requested.
Mid Sept, http://reut.rs/2teLqqT Bank's independent directors launch
investigation into sales
2016 practices; engage law firm Shearman & Sterling LLP. Sept. 19, http://reut.rs/2tLsbsv CEO John Stumpf appears before the Senate
Banking Committee, comes
2016 under fire for his oversight. Says customers who had
bogus accounts opened in their names will be compensated for damage to credit rating.
Democratic Senators Jeff Merkley and Elizabeth Warren ask him to resign. Warren says Stumpf should return his salary and be criminally investigated.
Sept. 27, http://reut.rs/2thWBPP Carrie Tolstedt, head of the retail
division at the center of the
2016 sales scandal, leaves ahead of her scheduled retirement
on Dec. 31; to get no severance or equity awards. Stumpf to forgo equity awards worth $41 million and salary.
Sept. 27, http://reut.rs/2teJGho Bank eliminates product sales goals in
retail division. 2016
Oct. 10, http://reut.rs/2teLF5h Forms new payments, virtual solutions and
innovation business group. 2016 Appoints new members to its operating committee, and leaders for consumer lending and wholesale banking.
Oct. 12, http://reut.rs/2teVFLZ Stumpf retires as CEO and chairman. Tim
Sloan appointed CEO.
2016 Names Steve Sanger independent chairman and Betsy
Duke independent vice chair.
Oct 14, http://reut.rs/2teUbBk Reports 3.7 percent drop in Q3 profit as
it sets aside funds for
2016 potential legal costs. Nov. 29, Amends by-laws to ensure board chairman and any vice
2016 independent directors. Jan. 10, http://reut.rs/2teLIOF Introduces new incentive compensation plan
2017 members in retail branches and call centres. Jan 13, http://reut.rs/2teWi8g Q4 profit falls 6.4 percent; says still
analyzing whether additional
2017 unauthorized accounts were opened in 2009 and 2010. Feb 20, http://reut.rs/2tillqY Board elects two new independent
directors, Karen Peetz and Ron
2017 Sargent. Feb 21, http://reut.rs/2teNOOn Terminates employment of four current and
former managers in Community
2017 Bank division due to the sales practices. Says none will
receive a 2016 bonus and each will forfeit all outstanding equity awards and stock options.
March 1, http://reut.rs/2teBcai Says no 2016 cash bonuses for eight senior
executives, including CEO
2017 Sloan and CFO John Shrewsberry; reduces three-year
equity awards made in 2014 by up to 50 pct for the executives.
April 13, http://reut.rs/2teTTKR; Posts nearly flat Q1 profit. Berkshire
Hathaway says to sell 9 million
2017 http://reut.rs/2tM1owd shares and withdraw its application for
permission to boost its ownership stake above 10 percent.
April 25, http://reut.rs/2tN2c42 Shareholders rebuke the bank at the annual
meeting; offer scant
2017 support for a dozen directors, including chairman
May 6, 2017 http://reut.rs/2tMaXv9 "At Wells Fargo, there were three significant mistakes, but one dwarfs all of the others ... You have to be careful what you incentivize. There was an incentive system built around cross-selling ... That was incentivizing the wrong kind of behavior," Warren Buffett at Berkshire's 52nd annual meeting "The main problem was they didn't act when they learned about it."
May 11, http://reut.rs/2tMGH3e Doubles cost-cutting target at investor
June 13, http://reut.rs/2tMk278 Branch employees paid for the first time
in May using new goals that
2017 focus on customer service, says branch banking chief
Mary Mack at an investor conference.
June 28, http://reut.rs/2tQ4wWk Receives no objection to its 2017 capital
plan from the U.S. Federal
2017 Reserve. July 13, http://reut.rs/2tNjM8b The Federal Reserve is prepared to act
against the directors of Wells
2017 Fargo if an investigation deems it appropriate, Chair
Janet Yellen said while testifying before the Senate Banking Committee
Source: Company filings, company presentations, Reuters
(Reporting By Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila)