Wells Fargo CEO John Stumpf retires effective immediately in wake of scandal over bank's sales practices

  • Stumpf has resigned, effective immediately, and will relinquish his title as chairman
  • COO Tim Sloan will succeed Stumpf, who has led since 2007, as CEO
  • Wells Fargo was found to have opened millions of bank accounts without customers' permission
  • Stumpf faced congressional hearings and was denied $41m of pay as punishment for the scandal

By Associated Press

Published: 16:28 EST, 12 October 2016 | Updated: 16:49 EST, 12 October 2016

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.

The San Francisco bank said Wednesday that Stumpf will also relinquish his title as chairman. 

Its chief operating officer, Tim Sloan, will succeed Stumpf as CEO.

Wells Fargo's CEO John Stumpf has resigned, effective immediately, as the nation's second-largest bank is roiled by a scandal over its sales practices. He faced congressional hearings last month after the bank opened millions of bank accounts without customers' permission

Wells Fargo's CEO John Stumpf has resigned, effective immediately, as the nation's second-largest bank is roiled by a scandal over its sales practices. He faced congressional hearings last month after the bank opened millions of bank accounts without customers' permission

Stumpf had led Wells Fargo since 2007.

He faced congressional hearings and consumer wrath after Wells Fargo was found to have opened millions of bank accounts without customers' permission. 

Last month he was denied $41 million in compensation as punishment for the scandal.

Stephen Sanger, the bank's lead director, will serve as the board's non-executive chairman. Independent director Elizabeth Duke will serve as vice chair.

Wells Fargo is due to report third-quarter earnings on Friday. 

Just last week fourteen senators called on the Justice Department to open a criminal investigation of Wells Fargo executives after the revelations that bank employees opened millions of fake bank and credit card accounts.

Last week senators called on the Justice Department to open a criminal investigation of executives. Regulators have fined the bank $185 million. Employees opened 2 million fake accounts in customers' names and signed people up for online banking without permission

Last week senators called on the Justice Department to open a criminal investigation of executives. Regulators have fined the bank $185 million. Employees opened 2 million fake accounts in customers' names and signed people up for online banking without permission

A bank teller who steals bills from a cash drawer is likely to face charges, the senators said in a statement, but 'an executive who oversees a massive fraud that implicates thousands of bank employees and costs customers millions of dollars can walk away with a hefty retirement package and millions in the bank.'

House and Senate hearings last month with Stumpf 'raised serious questions' that point to possible wrongdoing by Stumpf and other high-ranking executive, said the senators, all but one of them Democrats.

U.S. and California regulators have fined San Francisco-based Wells Fargo $185 million, saying bank employees trying to meet aggressive sales targets opened up to 2 million fake deposit and credit card accounts in customers' names. 

Regulators said employees issued and activated debit cards and signed people up for online banking without permission. 

The abuses are said to have gone on for years, unchecked by senior management.

In their letter, the senators urged Attorney General Loretta Lynch to hold Wells Fargo accountable as a corporation and also prosecute individual executives who may have broken the law.

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