Wells Fargo & Co (NYSE: WFC) CEO John Stumpf has resigned. After the scandal where it revealed that Wells Fargo has created about two million of fake accounts without customers’ knowledge, John Stumpf’s response was fire low level employees for the scheme, a decision he has been severely criticized for by Senator Elizabeth Warren, who called Stumpf a “gutless leader” who “should be criminally investigated.”
Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, said in the statement, “I’m surprised but not shocked… It’s very smart, especially given the disaster this has been for the company. As long as Stumpf remained, he would have been a lightning rod for criticism. Now they can focus on rebuilding their reputation.”
After the scandal was reported and investigated Stumpf reached a $185 million regulatory settlement between the bank, regulatory authorities and a Los Angeles prosecutor.
“They had three goals in replacing Stumpf: speed, integrity, and competence. If you want to move very fast and find someone intimately familiar with the business, you’ve got to hire an insider,” said Peter Conti-Brown, a business ethics and law professor at University of Pennsylvania’s Wharton School of Business, to Reuters.