This is how Warren Buffett spelt out that trouble is not over at Wells Fargo, and that the cleanup operation has still far to go. This is related to the finding of another 1.4 million unwanted accounts opened under the name of unaware clients, as reported in yesterday’s New York Times (see note 1 for link).
In my articles published on June 15th 2017 and October 26th 2016 (see links in note 2) I expressed that the Board had not understood the situation it is in if it went ahead to appoint Timothy J. Sloan, a 30-year Wells Fargo veteran and member of the senior management team when the original scandal erupted, as new CEO after the ousting of Jon Stumpf. I predicted that bad news would keep on coming and supported this statement on the obvious fact that a sick corporate culture cannot be cured from within.
Facts are now on the table. Wells Fargo is containing the cockroaches by killing one at a time as they come through the cracks, rather than doing what is necessary: Wiping them all out at once and getting to a fresh start.
One other reflection that emerges from this incident: The Board of Directors of the bank did an independent in-depth review of the false accounts incident with a highly detailed report that was published early this year. Why did these additional 1.4 million accounts not emerge then? Was the report as thorough and as independent as claimed? Why isn’t anybody talking about this?
NY Times – Well Fargo –