Seven Wells Fargo Managers in Board’s Review—and Their FatesBy and
Report describes executives’ actions in years before scandal
Some were slow to see scope wrongdoing, others raised concerns
When Wells Fargo & Co.’s board released a 113-page report Monday describing how staff opened bogus customer accounts, investigators aimed much of their criticism at the bank’s former leader, John Stumpf, and the head of its retail division, Carrie Tolstedt.
But the report also characterized the actions of more than a dozen other top executives and subordinates who saw warnings signs, ran operations where abuses flourished or tried to raise alarms. Here are snapshots of seven based on the report, as well as their fates (they either didn’t respond to messages seeking comment, or referred them to company spokeswomen who declined to comment):
- Patricia “Pat” Callahan: Described by Stumpf as a confidante, she held a number of senior posts and led Wachovia Corp.’s integration from 2008 before becoming chief administrative officer in 2011. She was aware the community bank was firing roughly 1,000 people annually for improper sales. After a Los Angeles Times story cast a spotlight on sales abuses in 2013, she pushed to address the problem and limit reputational damage, writing in an email that she hoped the story “doesn’t become national.” Still, “Callahan did not raise sales practice issues with the board,” the report found. She retired in 2015.
- Hope Hardison: The former human resources director succeeded Callahan as chief administrative officer. At HR, she was long aware of issues with sales practices, but didn’t initially understand them to be pervasive, investigators said. A subordinate sent her a report in 2013 that included a table of incidents and terminations, but she didn’t recall reviewing it in detail. Her concern mounted after the Los Angeles Times story, and after hearing at an April 2014 meeting about 1,000 firings, she “had a strong negative reaction” and pushed for the community bank to do more to fix the problem.
- James Strother: As general counsel, Strother kicked off a May 2015 presentation to the board’s risk committee (the board doesn’t specify what he said), before Tolstedt spoke. Some directors later said the meeting left them with the impression that only 230 people had been terminated for sales abuses over the prior two years. In reality, it was more like 2,500. The bank persuaded Strother, 65, last year to delay retirement amid the scandal’s fallout.
- John Sotoodeh: While overseeing a growing number of branches, he “displayed a high-pressure management style,” particularly in San Diego, investigators wrote. He later oversaw Los Angeles when it became the epicenter of a type of misconduct known as simulated funding, in which staff temporarily moved money into bogus customer accounts. “However, multiple witnesses described Sotoodeh as having made significant attempts to improve the sales culture,” and his area’s metrics improved, the report found. After he rose higher, the bank demoted him last month to run a smaller four-state region.
- Lisa Stevens: The regional manager was a “vocal advocate” within the community bank for changing sales goals and the behavior they encouraged, according to the report. She raised concerns with senior employees outside the division including the bank’s chief risk officer, Michael Loughlin. At one point, Tolstedt found out and told her to stop talking with him, the authors wrote.
- Michael Loughlin: He became the company’s risk chief in 2010 but didn’t have “directive power to enforce changes” on some businesses because of a decentralized management structure, according to the report. Still, he wrote in 2013 that he should have pushed Tolstedt to do more about sales problems. As it responds to the scandal, Wells Fargo is shifting risk personnel to give him more control.
- Mary Mack: The report only mentions the former Wells Fargo brokerage chief one time -- as Tolstedt’s replacement. Last month, Mack restructured the community bank’s leadership. New Chief Executive Officer Tim Sloan told journalists on a call Monday there isn’t “another large shoe to drop” on management changes.
An attorney for Stumpf declined to comment on the report. Tolstedt, who declined to be interviewed for the investigation, rejected its conclusions in a statement from her attorney.
“We strongly disagree with the report and its attempt to lay blame with Ms. Tolstedt,” said Enu Mainigi, a lawyer with Williams & Connolly LLP. “A full and fair examination of the facts will produce a different conclusion.”