Wells Fargo CEO John Stumpf to resign in wake of scandal

EMBED </>More News Videos

Wells Fargo's embattled CEO John Stumpf has resigned, effective immediately, as the nation's second-largest bank is roiled by a scandal over its sales practices. (KGO-TV)

Wells Fargo's embattled CEO is out. John Stumpf is retiring effective immediately. The move comes as the San Francisco bank has been mired in scandal over the creation of millions of unauthorized accounts.

Stumpf has retired from the company and the board. He submitted a letter informing the bank Wednesday morning, a move that reportedly surprised the bank's board of directors. Stumpf had led Wells Fargo since 2007.

RELATED: House lawmakers heap blustering criticism on Wells Fargo CEO

In a statement, Wells Fargo's lead director Stephen Sanger, says Stumpf "believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the company forward."

RELATED: Wells Fargo CEO out amid scandal

Wells Fargo's Chief Operating Officer Tim Sloan, will succeed Stumpf as CEO.

East Bay congressman mark Desaulnier called on Stumpf to step down two weeks ago.

"I think it's a first big step," Desaulnier said. "I think this is an acknowledgment that the public doesn't have confidence in Wells Fargo, which I think is a shame. It's a great institution. I used to bank with them. But I wouldn't bank with them again until I knew they changed the culture."

Stumpf, who joined Wells Fargo in 1982, successfully navigated the company through the financial crisis of 2008, keeping it free of scandal.

But the bank's years-long practice of low-level employees opening fake accounts to meet sales quotas ignited widespread anger, from customers to politicians.

He has appeared before congress twice since the scandal broke.

Peninsula attorney Joseph Cotchett says a retirement doesn't go far enough.

He filed a lawsuit against Wells Fargo on behalf of shareholders.

"All shareholders we've spoken to are clear that it's an outrage that he's being allowed to retire without kicking back all of the bonuses he's made over the past several years," Cotchett said.

Cotchett's lawsuit on behalf of shareholders is seeking a clawback of all the bonuses paid to the higher ups who knew about the fake accounts.

As for Stumpf, it's estimated he'll walk away with more than $134 million.

Click here for more stories on Wells Fargo.
Related Topics:
businesswells fargobankscandalSan Francisco
(Copyright ©2016 KGO-TV. All Rights Reserved.)

Load Comments