Bank Watch

Wells Fargo fires 4 executives as it probes sales scandal

Wells Fargo on Tuesday said it was firing four executives in its retail bank, in the first terminations stemming from an ongoing board investigation of a sales scandal that erupted last September.

The four were terminated “for cause by a unanimous vote of the board,” the San Francisco-based bank said in a statement. Three of the fired executives reported to top officers in the company.

The board launched its investigation in late September, about three weeks after authorities fined Wells $185 million over allegations that employees opened as many as 2 million fake customer accounts to meet aggressive sales goals.

The scandal damaged the bank’s once-sterling reputation, spurred a flurry of new investigations and led to the departure last year of two top executives: CEO John Stumpf and community banking head Carrie Tolstedt.

Two of the newly fired executives had reported directly to Tolstedt, who had been based in San Francisco: Matthew Raphaelson, head of community bank strategy and initiatives; and Claudia Russ Anderson, former community bank chief risk officer. Raphaelson had been based in San Francisco, Anderson in Minneapolis.

In September, the bank had said Anderson, the top risk manager in the community banking unit, was on a leave of absence and had been replaced in that role.

The board also terminated Shelley Freeman, head of consumer credit solutions and former Los Angeles regional president, and Pamela Conboy, Arizona lead regional president.

Freeman, based in Los Angeles, had most recently been reporting to Avid Modjtabai, the bank’s San Francisco-based head of payments, virtual solutions and innovation. Conboy had reported to Southwest Regional President John Sotoodeh.

Wells Fargo did not say what the executives did wrong or provide any other details.

The fired executives will not receive a bonus for 2016 and will forfeit all of their unvested stock and vested outstanding stock options, the bank said in its statement.

The executives add to the count of 5,300 mostly low-level branch employees the bank has previously said it fired over five years for their role in the scandal. Employees have said they opened the accounts to meet high-pressure sales goals and avoid losing their jobs.

Earlier this month, a person familiar with the matter said Wells’ board was likely to scrap annual 2016 bonuses for some top leaders, including CEO Tim Sloan, as the bank seeks to recover from the scandal. The step, if taken, could be disclosed in coming weeks.

On Tuesday, Wells said the board investigation is expected to be completed before the bank’s annual shareholder meeting in April. Findings from the probe “and any additional actions” will be made public by that time, the bank said.

Wells has its biggest employee base in Charlotte following its 2008 acquisition of Wachovia. A Charlotte-based executive, Mary Mack, replaced Tolstedt last year as head of the community bank.

Deon Roberts: 704-358-5248, @DeonERoberts