The CEO of embattled banking giant Wells Fargo & Co (NYSE:WFC), sullied by a far-reaching account-opening scandal, has resigned from his post as Reserve Bank of San Francisco’s appointee to the Fed’s Federal Advisory Council.
Chief executive John Stumpf stepped down from his post on the panel, calling the move a “personal decision.” He also said his “top priority is leading Wells Fargo,” according to a spokesperson.
The Federal Reserve routinely consults with big bankers regarding its policy decisions, and seeing as Wells Fargo is based in San Francisco, Stumpf was the natural rep for the Fed’s SF arm. He’d served as Federal Advisory Council appointee for the past couple of years, with these sorts of reps typically serving three one-year terms.
Stumpf clearly has his hands full running Wells Fargo, which is in hot water over an account-opening scandal that defrauded millions of customers and led to over 5,000 employees being fired. The company is under investigation by the U.S. Senate, SEC, Consumer Financial Protection Bureau, and most recently, the Department of Labor.
The DOL is looking into whether Wells was justified in canning those employees for overstepping their posts, or if they were simply acting under orders from management to do whatever it took to meet sales quotas. They also reportedly were expected to work extra hours but weren’t properly compensated with overtime pay.
Investors can expect a lot more fireworks stemming from the scandal in coming weeks, with House Financial Services chairman Rep. Jeb Hensarling recently commenting “We’re probably only in the third inning. There’s lots more to go here and we’re only starting investigation now.”
Wells Fargo shares closed at $45.72 yesterday, down $0.11 (-0.24%), and were inactive in premarket trading Friday. Year-to-date, WFC has fallen 15.89%.