Advocates Say “Wells Fargo Is Too Big To Manage”
Public Citizen has filed a first-ever shareholder resolution (PDF) at Wells Fargo calling for a breakup study in the wake of the bank’s massive fraud. The resolution, submitted Thursday by Bartlett Naylor, financial policy advocate for Public Citizen’s Congress Watch division, asks the Wells Fargo board of directors to retain independent experts to explore whether the company would be worth more in parts, with the FDIC-insured bank separate from other divisions.
“Roughly 5,300 employees of the community banking division perpetrated a massive fraud by unlawfully opening two million accounts for unwitting customers,” the resolution explains. “Rather than sanction the community banking chief executive, Wells Fargo celebrated her tenure with a $125 million retirement package. Rather than acknowledging a management breakdown, CEO John Stumpf blamed a minority of bad employees. He claimed there was no reason for the employees to commit the fraud. ‘There was no incentive to do bad things,’ Stumpf told the Wall Street Journal. Taking CEO Stumpf at his word, then, we believe he effectively argues that his firm is so large as to be unmanageable.”
Naylor has submitted similar shareholder resolutions in the past two years to Citigroup, JPMorgan and Bank of America. Wells Fargo, once considered among the more conservatively structured of the megabanks with relatively little high risk derivatives activity, has nevertheless committed major infractions of the law in the past decade.
Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts. More information on this nonprofit may be found at www.citizen.org.