Careful what you wish for

13 October 2016 By Antony Currie Follow @AntonyMCurrie

The financial impact of the fake-accounts scandal is small, but its nature and Wells Fargo’s response sealed its CEO’s fate. The retail units Goldman and Morgan Stanley are building provide diversification, but open new doors for prying regulators and career-threatening missteps.

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John Stumpf retired as chairman and chief executive of Wells Fargo on Oct. 12, effective immediately. The board has elected Tim Sloan, president and chief operating officer, to succeed Stumpf as CEO, and Stephen Sanger, lead director, to serve as non-executive chairman.

The California-based lender said on Oct. 10 that it is promoting three executives to its operating committee, all reporting to Sloan.

The bank on Sept. 8 agreed to pay $190 million to settle charges that its retail bankers illegally and secretly opened as many as 2 million unauthorized accounts between 2011 and 2016 to help meet sales targets. Stumpf faced a grilling in both houses of the U.S. Congress later last month, and also forfeited $41 million in unvested equity awards.

Wells Fargo is due to report third-quarter earnings on Oct. 14.

Goldman Sachs launched its consumer-focused online lending platform, called Marcus, on Oct. 13.

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