24/7 Wall St. named Wells Fargo & Co. (NYSE: WFC) CEO Tim Sloan one of the worst in America late last year. The case for the selection persists and has gotten more powerful.
Last week, the bank entered into a permanent settlement over a securities fraud class action suit. The deal will cost the bank $480 million if it is approved by the court that has jurisdiction. At the core of the suit is the accusation that Wells Fargo management helped artificially drive up the value of its stock in the period from early 2014 until September 2016. The previous CEO, John Stumpf, was pushed out last October. Sloan was president of Wells Fargo from November 2015 until he took over.
In April, the bank paid approximately $1 billion in a deal with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency. The claim against the bank was that it had made illegal charges to some people with home and auto loans.
In February, the Federal Reserve capped that amount of deposits it could take from institutions. The decree also said Wells Fargo would have to replace some directors.
Here is the 24/7 Wall St. article about Sloan being one of America’s 20 worst CEOs:
When the board at Wells Fargo (NYSE: WFC) dumped former CEO John Stumpf because bank employees had opened some 1.5 million checking and 500,000 credit card accounts without customers’ consent, the bank installed its No. 2 executive, Tim Sloan, in his place. The decision was made even though the problems had happened on Sloan’s watch as well.
Since Sloan took over as CEO, matters have gotten worse. Among the most notable problems involving Wells Fargo was a racketeering lawsuit, settled for $50 million late last year, that alleged the bank had overcharged homeowners hundreds of thousands of dollars after they defaulted on their mortgages. Then regulators fined Wells Fargo and other businesses a total of $14.4 million for record-keeping problems that may have allowed company and customer documents to be altered.
The San Francisco, California-based bank has had to face other issues, too. There were accusations that it conducted business practices that hurt mortgage and car loan clients. And Wells Fargo was also charged with overcharging foreign exchange customers. Sloan’s short tenure has been horrible for customers.
So far this year, Wells Fargo shares are down 14% to about $52.