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Wells Fargo fires 4 senior managers in sales scandal

 

Of the 15,391 Wells Fargo accounts in Maryland that were flagged as unauthorized, 524 incurred fees, such as late payment or overdraft fees. A Wells Fargo spokeswoman added that some of the flagged accounts may have been false positives in instances where a customer signed up for a credit card but never activated it. Customers that incurred such fees were given a $25 refund on average. There are about 1.36 million deposit account and credit card holders in Maryland. (File photo)

In Maryland, a review of Wells Fargo credit card and deposit accounts last year found that 15,391 accounts in the state may have been unauthorized. That figure includes a roughly even split between credit cards and deposit accounts. Of those flagged accounts in Maryland, 524 incurred fees that were reimbursed. (File photo)

Wells Fargo’s board of directors fired four senior managers as part of its investigation into the bank’s sales practices scandal.

Tuesday’s announcement is the first public firing of managers and executives since Wells acknowledged in September that its employees opened up to 2 million bank and credit card accounts without customer authorization in order to meet lofty sales goals.

When the scandal first broke, Wells had said it had fired roughly 5,300 employees as a result of the scandal, the vast majority of them lower-level workers. Numerous low-level employees at the bank have said that intense sales pressure from senior managers was at least partially why they were driven to open the accounts.

The board said the four executives being terminated, effective immediately, were Claudia Anderson, the former community bank chief risk officer; Pamela Conboy, the lead regional president in Arizona; Shelly Freeman, the former regional president in Los Angeles; and Matthew Raphaelson, head of the community bank’s strategy and initiatives. The board said the decision was unanimous.

The board also voted to deny any 2016 bonuses to the executives, and they will forfeit any unvested stock and stock options.

Maryland accounts

In Maryland, a review of Wells Fargo credit card and deposit accounts last year found that 15,391 accounts in the state may have been unauthorized. That figure includes a roughly even split between credit cards and deposit accounts. Of those flagged accounts in Maryland, 524 incurred fees that were reimbursed.

Wells Fargo has said the number of potentially unauthorized accounts is a high estimate, as many of the flagged accounts, especially on the credit side, were singled out for having cards that were ordered but not activated.

There are about 1.36 million deposit account and credit card holders in Maryland.

Wells’ board has been conducting its own investigation into the bank’s scandal. That inquiry is expected to be finished before the company’s annual shareholder meeting in April, the board said.

Executives’ duties

The four executives fired represent markets and parts of Wells that were among those believed to be most deeply involved in the unethical practices.

Anderson has been on unpaid leave since June, a spokeswoman for the bank said. As the community bank’s chief risk officer, she had been in charge of the committee that in theory should have raised the alarm sooner to any questionable or illegal behavior.

Conboy worked for Wells Fargo for more than 37 years, according to her LinkedIn profile. Arizona was an area disproportionately affected by the sales practices scandal.

Freeman had been with Wells Fargo since 1996, serving in numerous roles at the bank. She had been promoted to Wells’ head of consumer credit solutions in 2014, but served as president of the Los Angeles market before then. Southern California was where news of the unethical sales practices started, following an investigation by The Los Angeles Times.

Raphaelson had been with Wells since at least 2003, heading up strategy and initiatives at the bank, and would have been partially in charge of designing sales programs at the bank.

Before Tuesday’s announcement, the only two executives to publicly lose their jobs following the sales practices scandal had been John Stumpf, the former CEO of Wells who resigned in October, and Carrie Tolstedt, the former head of Wells’ community bank, who moved up her retirement date and left the bank in June. Both Tolstedt and Stumpf also had part of their announced 2016 bonuses rescinded.