Wells Fargo bank was in trouble due to to 1.5 million unauthorized accounts and credit cards were issued under the name of existing customers without their authorization. This activity has led to the breach of trust of the investors who trusted the ethical functioning of the Bank. The lower level employees were terminated by the higher authorities for this wrongful deed but what about the higher authorities who are involved in it. The investor’s group will decide on Tuesday, whether they should rely on the new board of directors including Chief Executive Officer Tim Sloan and Chairman Stephen Sanger to tackle with this damage or to take the strategic decision to payout.
Wells Fargo was fined with an amount of $185 to be paid to the governing bodies and also pay back to the customers who suffered financially because of this activity. So in total, they have spent nearly $445 million in all to save the empire. The final decision would be announced after the annual shareholders meeting on Tuesday. Proxy advisers and California Treasurer John Chiang has suggested terminating minimum 12 out of 15 boards of directors who failed to dig in this unethical practice followed by the officials of the bank leading to losing the trust and confidence of the customers.
Warren Buffett’s Berkshire Hathaway Inc. Is one of the biggest investor of the bank and has firmly supported in trusting the capabilities of the newly formed management team? But many other investors are not in favor of the management team. The damage is to the Public image of the bank and since they have a tough time to regain the lost trust of the customer, the bank needs to find out new ways by which they can retain the faith of the customer and get back the lost prestige.
There has been a split opinion pertaining to the termination and retention of all the board of directors. Parnassus Investments didn’t support the management team of Sanger including four other director colleagues. The California State Teachers’ Retirement System and California Public Employees’ Retirement System had blamed the poor supervision system of all the nine board of directors and voted against all of them to be terminated from their services.
Wells Fargo is under scrutiny for illegally financing the Dakota Access oil pipeline along with 13 other financiers for an amount of $120 individually. The are facing protest and criticism from the Native American-rights activists. the Standing Rock Sioux is the tribe affected due to the installation of the pipeline and their attorneys would be present at the board meeting to get proper justification in this case as well from the investors.