Wells Fires Area Chiefs Over Sales Scandal -- WSJ

Date : 12/06/2018 @ 8:02AM
Source : Dow Jones News
Stock : Wells Fargo & Company (WFC)
Quote : 47.76  -1.04 (-2.13%) @ 5:06AM

Wells Fires Area Chiefs Over Sales Scandal -- WSJ

Wells Fargo (NYSE:WFC)
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By Emily Glazer 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 6, 2018).

Wells Fargo & Co. is firing around three dozen district managers for oversight failures related to a sales scandal that erupted in its retail bank more than two years ago, according to people familiar with the matter.

Senior executives, including consumer banking head Mary Mack, have briefed the Office of the Comptroller of the Currency on the firings, one of the people said. The bank has sought to reassure regulators it is fixing problems that have emerged throughout the bank following the sales-practices scandal.

A Wells Fargo spokeswoman declined to comment. An OCC spokesman declined to comment.

The firings mark the first wave of district manager terminations following Wells Fargo's settlement with regulators in September 2016 related to improper sales practices.

District managers at Wells Fargo typically oversee anywhere from five to 15 retail bank branches, depending on the area, the people said. They largely were spared as the company fired some 5,300 employees related to perhaps millions of fake accounts that were opened in pursuit of lofty sales goals.

Wells Fargo has spent the last two years dealing with the fallout from the sales scandal. Since Sept. 2016, problems and investigations have cropped up at business units throughout the bank, including wealth management and foreign exchange.

Wells Fargo has struggled to convince regulators that it has an effective risk management framework to catch and prevent problems that could harm customers. In February, the Federal Reserve imposed an unprecedented cap on the bank's growth. The OCC recently sent rare warning letters to two of the bank's top executives, leading Wells Fargo to place them on leave .

In recent weeks, lawyers for Wells Fargo have questioned dozens of the district managers about activities or documents related to sales practices, in some cases going back more than 10 years, according to people familiar with the matter. Some district managers, including bank veterans of a decade or more, were asked about high sales numbers following a bank-approved "Jump into January" sales program, one of the people said.

Some managers also were asked about human-resources complaints that the bank already has investigated, the person added.

In 2017, Ms. Mack took steps to reorganize the retail bank, including restructuring the regions in the western half of the U.S. and rearranging executive positions. Wells Fargo has said it plans to reduce its retail bank network to about 5,000 branches by the end of 2020 through consolidations and divestitures.

Write to Emily Glazer at emily.glazer@wsj.com

 

(END) Dow Jones Newswires

December 06, 2018 02:47 ET (07:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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