Having claimed the job of CEO John Stumpf, the Wells Fargo cross-selling fiasco continues to reverberate within the org chart of the scandal-ridden bank. Reuters reports that James Strother, the general counsel of Wells Fargo, who had originally planned to retire at year-end, will be forced to stay on indefinitely in the position to deal with fallout from the bank’s sales scandal, according to a bank spokesman.
“In light of recent events the decision was made to have Jim Strother remain with the company and continue to serve as our general counsel,” said Peter Gilchrist, a Wells Fargo spokesman. The decision to keep Stroher on was made by the bank’s board of directors according to Gilchrist.
Strother became Wells’ top lawyer in 2003, and sat behind then-CEO John Stumpf at a bruising congressional hearing about the scandal in September. He has been at Wells Fargo and its predecessor, Norwest Corporation, for the past 30 years. Reuters explains that having turned 65 this year, Strother would ordinarily be required to retire at the end of the year, according to an internal policy at Wells Fargo affecting members of the bank’s operating committee. However, the bank occasionally makes exceptions to this rule in extraordinary situations, which the bank’s current litigation-plagued scandal clearly is. During the financial crisis, then-Chairman Dick Kovacevich postponed his retirement by slightly more than a year.
Having lost its CEO after two grueling sessions in Congress, Wells remains under fire for opening as many as 2 million accounts in customers’ names without their permission. The bank is facing lawsuits from former employees and customers, as well as increased regulatory scrutiny. Having reached a $190 million settlement in September, the largest American mortgage lender is now working to answer questions from politicians and regulators, replace a flawed compensation system that incentivized employees to open phantom accounts, and repair its reputation among customers, including municipalities that have cut business ties.
Two weeks ago the bank reported for the first time that its new account openings had plunged by 44% while credit card applications had tumbled by half in the period immediately following the scandal. It recently launched an ad campaign seeking to explain to the general public that it is “making changes to make things right.”
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