Rhode Island General Treasurer Seth Magaziner has joined shareholders from across the country by voting against all sitting independent directors at Wells Fargo, following the massive fraud perpetrated against their customers. The Rhode Island pension fund currently owns 139,256 shares of Wells Fargo (NYSE: WFC).
"Over the course of many years, the board of directors at Wells Fargo failed to provide adequate oversight of the company, including its illegal sales practices," said Treasurer Magaziner. "Millions of Wells Fargo customers were harmed while the board abdicated their oversight authority - all while being compensated with shareholder's money. I cannot in good faith reward their indifference by voting to approve their continued tenure on the Wells Fargo board."
Rhode Island has also joined a coalition of investors, including The Sisters of St. Francis of Philadelphia and members of the Interfaith Center on Corporate Responsibility in co-filling a shareholder proposal requesting that Wells Fargo issue a comprehensive, public report on "the root causes of the fraudulent activity and steps taken to improve risk management and steps taken to improve risk management and control processes."
On April 10, 2017, Wells Fargo published a report which provides limited information on what happened within the bank, leading up to the massive fraud. The report gives no reasonable explanation of how it is possible that the board, itself, remained unaware of the widespread illegal actions and practices of thousands of its employees.
The Consumer Financial Protection Bureau (CFPB) found that, from 2011 through 2016, Wells Fargo opened nearly 1.5 million sham bank accounts and applied for over a half million credit cards in their customers' names, enrolled consumers in online banking services that they did not request; and ordered and activated debit cards using consumers' information. Subsequently, Wells Fargo identified an additional 2.1 million accounts that may have been fraudulently opened by bank employees.
In September of 2016, Wells Fargo paid a $185 million settlement to the CFPB. In the past week, Wells Fargo expanded its class-action settlement to include any customers impacted by sales scandal issues as early as May 2002. The updated settlement is $142 million, up $32 million from the previously announced amount.
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Contact:
Evan England, Director of Communications Office of the General Treasurer (401) 439-2199 / evan.england@treasury.ri.gov