September 2, 2017 / 2:04 PM / a year ago

TIMELINE-Unraveling of Wells Fargo sales scandal

 (Adds explanation that more suspect accounts were revealed on Aug. 31 after more years were
    Sept 2 (Reuters) - Wells Fargo & Co on Aug. 31 raised the estimate of accounts
opened without customers' knowledge by 1.4 million, bringing the total to about 3.5 million.

    The scandal over phony accounts came to light last September after the company announced a
$185 million settlement with regulators to atone for the sales abuses.
    Wells Fargo, the third-largest U.S. bank by assets, has since encountered numerous
government probes and lawsuits. 
    In response, Wells Fargo has fired senior managers, changed pay incentives for branch staff,
separated the role of chairman and chief executive and faced a difficult shareholder vote at its
annual meeting.
    John Stumpf, the company's chief executive when the scandal broke, announced his retirement
in October, following weeks of intense public pressure. He was succeeded by Tim Sloan.
    The bank still faces probes from federal, state and local government agencies, including the
U.S. Department of Justice, as well as a number of private lawsuits, according to regulatory
    Here are the important events that took place since news of the sales scandal emerged:
 DATE         USN       NEWS
 Sept. 8,  Agrees to pay $185 million in fines and $5 million in penalties to
 2016                   customers, as part of settlement with Los Angeles officials who
                        accused the bank of pushing customers into multiple, fee-generating
                        accounts that they never requested.
 Mid Sept,  Bank's independent directors launch investigation into sales
 2016                   practices; engage law firm Shearman & Sterling LLP.    
 Sept. 19,  CEO John Stumpf appears before the Senate Banking Committee, comes
 2016                   under fire for his oversight. Says customers who had bogus accounts
                        opened in their names will be compensated for damage to credit rating.
                        Democratic Senators Jeff Merkley and Elizabeth Warren ask him to
                        resign. Warren says Stumpf should return his salary and be criminally
 Sept. 27,  Carrie Tolstedt, head of the retail division at the center of the
 2016                   sales scandal, leaves ahead of her scheduled retirement on Dec. 31; to
                        get no severance or equity awards.    
                        Stumpf to forgo equity awards worth $41 million and salary.
 Sept. 27,  Bank eliminates product sales goals in retail division.
 Oct. 10,  Forms new payments, virtual solutions and innovation business group.  
                        Appoints new members to its operating committee, and leaders for
                        consumer lending and wholesale banking.
 Oct. 12,  Stumpf retires as CEO and chairman. Tim Sloan appointed CEO.
 2016                   Names Steve Sanger independent chairman and Betsy
                        Duke independent vice chair.
 Oct 14,  Reports 3.7 percent drop in Q3 profit as it sets aside funds for
 2016                   potential legal costs.
 Nov. 29,               Amends by-laws to ensure board chairman and any vice chairman be
 2016                   independent directors.
 Jan. 10,  Introduces new incentive compensation plan for team
 2017                   members in retail branches and call centers.
 Jan 13,  Q4 profit falls 6.4 percent; says still analyzing whether additional
 2017                   unauthorized accounts were opened in 2009 and 2010.
 Feb 20,  Board elects two new independent directors, Karen Peetz and Ron
 2017                   Sargent.
 Feb 21,  Terminates employment of four current and former managers in Community
 2017                   Bank division due to the sales practices. Says none will receive a
                        2016 bonus and each will forfeit all outstanding equity awards and
                        stock options.
 March 1,  Says no 2016 cash bonuses for eight senior executives, including CEO
 2017                   Sloan and CFO John Shrewsberry; reduces three-year equity awards made
                        in 2014 by up to 50 pct for the executives.
 April 13,;  Posts nearly flat Q1 profit. Berkshire Hathaway says to sell 9 million
 2017  shares and withdraw its application for permission to boost its
                        ownership stake above 10 percent.
 April 25,  Shareholders rebuke the bank at the annual meeting; offer scant
 2017                   support for a dozen directors, including chairman
 May 6, 2017  "At Wells Fargo, there were three significant mistakes, but one dwarfs
                        all of the others ... You have to be careful what you incentivize.
                        There was an incentive system built around cross-selling ... That was
                        incentivizing the wrong kind of behavior," Warren Buffett at
                        Berkshire's 52nd annual meeting
                        "The main problem was they didn't act when they learned about it."
 May 11,  Doubles cost-cutting target at investor day 
 June 13,  Branch employees paid for the first time in May using new goals that
 2017                   focus on customer service, says branch banking chief Mary Mack at an
                        investor conference.
 June 28,  Receives no objection to its 2017 capital plan from the U.S. Federal
 2017                   Reserve.
 July 13,  The Federal Reserve is prepared to act against the directors of Wells
 2017                   Fargo if an investigation deems it appropriate, Chair Janet Yellen
                        said while testifying before the Senate Banking Committee
 July 14,  Q2 revenue misses estimates; bank indicates costs may remain elevated
 2017                   in the near term
 August 31,  Says 1.4 million additional accounts were potentially opened without
 2017                   permission, bringing the total estimate to 3.5 million accounts
                        opened. The disclosure was made after a third party hired by Wells
                        Fargo examined accounts stemming back to 2009, a broader time frame
                        than a review conducted last year.
    Source: Company filings, company presentations, Reuters 

 (Reporting By Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila, Carmel Crimmins and
Steve Orlofsky)
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